Correlation Between Invesco Health and Impax Asset
Can any of the company-specific risk be diversified away by investing in both Invesco Health and Impax Asset 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 Health and Impax Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Health Care and Impax Asset Management, you can compare the effects of market volatilities on Invesco Health and Impax Asset 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 Health with a short position of Impax Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Health and Impax Asset.
Diversification Opportunities for Invesco Health and Impax Asset
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Impax is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Health Care and Impax Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Asset Management and Invesco Health 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 Health Care are associated (or correlated) with Impax Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Asset Management has no effect on the direction of Invesco Health i.e., Invesco Health and Impax Asset go up and down completely randomly.
Pair Corralation between Invesco Health and Impax Asset
Assuming the 90 days trading horizon Invesco Health Care is expected to generate 0.26 times more return on investment than Impax Asset. However, Invesco Health Care is 3.84 times less risky than Impax Asset. It trades about 0.04 of its potential returns per unit of risk. Impax Asset Management is currently generating about -0.07 per unit of risk. If you would invest 63,114 in Invesco Health Care on August 29, 2024 and sell it today you would earn a total of 7,321 from holding Invesco Health Care or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Health Care vs. Impax Asset Management
Performance |
| Timeline |
| Invesco Health Care |
| Impax Asset Management |
Invesco Health and Impax Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Health and Impax Asset
The main advantage of trading using opposite Invesco Health and Impax Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Health position performs unexpectedly, Impax Asset 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 Impax Asset will offset losses from the drop in Impax Asset's long position.| Invesco Health vs. Leverage Shares 3x | Invesco Health vs. Leverage Shares 3x | Invesco Health vs. Leverage Shares 3x | Invesco Health vs. WisdomTree Short GBP |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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