Correlation Between Invesco Trust and Southern Michigan
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and Southern Michigan 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 Southern Michigan 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 Southern Michigan Bancorp, you can compare the effects of market volatilities on Invesco Trust and Southern Michigan 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 Southern Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and Southern Michigan.
Diversification Opportunities for Invesco Trust and Southern Michigan
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and Southern is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Southern Michigan Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Michigan Bancorp 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 Southern Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Michigan Bancorp has no effect on the direction of Invesco Trust i.e., Invesco Trust and Southern Michigan go up and down completely randomly.
Pair Corralation between Invesco Trust and Southern Michigan
Considering the 90-day investment horizon Invesco Trust For is expected to under-perform the Southern Michigan. But the stock apears to be less risky and, when comparing its historical volatility, Invesco Trust For is 1.79 times less risky than Southern Michigan. The stock trades about 0.0 of its potential returns per unit of risk. The Southern Michigan Bancorp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,716 in Southern Michigan Bancorp on September 12, 2024 and sell it today you would earn a total of 209.00 from holding Southern Michigan Bancorp or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Trust For vs. Southern Michigan Bancorp
Performance |
| Timeline |
| Invesco Trust For |
| Southern Michigan Bancorp |
Invesco Trust and Southern Michigan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and Southern Michigan
The main advantage of trading using opposite Invesco Trust and Southern Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, Southern Michigan 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 Southern Michigan will offset losses from the drop in Southern Michigan'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 |
| Southern Michigan vs. FS Bancorp | Southern Michigan vs. Eastern Michigan Financial | Southern Michigan vs. Grand River Commerce | Southern Michigan vs. Bank of Botetourt |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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