Correlation Between Invesco Trust and Swiss Re
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and Swiss Re 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 Swiss Re 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 Swiss Re, you can compare the effects of market volatilities on Invesco Trust and Swiss Re 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 Swiss Re. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and Swiss Re.
Diversification Opportunities for Invesco Trust and Swiss Re
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Swiss is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Swiss Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Re 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 Swiss Re. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Re has no effect on the direction of Invesco Trust i.e., Invesco Trust and Swiss Re go up and down completely randomly.
Pair Corralation between Invesco Trust and Swiss Re
Considering the 90-day investment horizon Invesco Trust is expected to generate 3.28 times less return on investment than Swiss Re. But when comparing it to its historical volatility, Invesco Trust For is 3.32 times less risky than Swiss Re. It trades about 0.1 of its potential returns per unit of risk. Swiss Re is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,432 in Swiss Re on September 4, 2024 and sell it today you would earn a total of 312.00 from holding Swiss Re or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Trust For vs. Swiss Re
Performance |
| Timeline |
| Invesco Trust For |
| Swiss Re |
Invesco Trust and Swiss Re Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and Swiss Re
The main advantage of trading using opposite Invesco Trust and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, Swiss Re 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 Swiss Re will offset losses from the drop in Swiss Re'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 |
| Swiss Re vs. Western Asset Global | Swiss Re vs. Invesco Trust For | Swiss Re vs. Logan Ridge Finance | Swiss Re 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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