Correlation Between Invesco Trust and Fentura Financial
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and Fentura Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Invesco Trust and Fentura Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Trust For and Fentura Financial, you can compare the effects of market volatilities on Invesco Trust and Fentura Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Invesco Trust with a short position of Fentura Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and Fentura Financial.
Diversification Opportunities for Invesco Trust and Fentura Financial
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and Fentura is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Fentura Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fentura Financial and Invesco Trust is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Invesco Trust For are associated (or correlated) with Fentura Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fentura Financial has no effect on the direction of Invesco Trust i.e., Invesco Trust and Fentura Financial go up and down completely randomly.
Pair Corralation between Invesco Trust and Fentura Financial
Considering the 90-day investment horizon Invesco Trust is expected to generate 4.52 times less return on investment than Fentura Financial. But when comparing it to its historical volatility, Invesco Trust For is 3.42 times less risky than Fentura Financial. It trades about 0.07 of its potential returns per unit of risk. Fentura Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,186 in Fentura Financial on September 3, 2024 and sell it today you would earn a total of 2,364 from holding Fentura Financial or generate 108.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.4% |
| Values | Daily Returns |
Invesco Trust For vs. Fentura Financial
Performance |
| Timeline |
| Invesco Trust For |
| Fentura Financial |
Invesco Trust and Fentura Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and Fentura Financial
The main advantage of trading using opposite Invesco Trust and Fentura Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, Fentura Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fentura Financial will offset losses from the drop in Fentura Financial's long position.| Invesco Trust vs. Pimco New York | Invesco Trust vs. Pimco New York | Invesco Trust vs. BlackRock New York | Invesco Trust vs. Invesco California Value |
| Fentura Financial vs. Western Asset Global | Fentura Financial vs. Invesco Trust For | Fentura Financial vs. Logan Ridge Finance | Fentura Financial vs. Invesco Advantage MIT |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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