Correlation Between Invesco Municipal and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Catalyst/millburn 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 Municipal and Catalyst/millburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Income and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Invesco Municipal and Catalyst/millburn 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 Municipal with a short position of Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Catalyst/millburn.
Diversification Opportunities for Invesco Municipal and Catalyst/millburn
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and Catalyst/millburn is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Invesco Municipal 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 Municipal Income are associated (or correlated) with Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Invesco Municipal and Catalyst/millburn
Assuming the 90 days horizon Invesco Municipal Income is expected to under-perform the Catalyst/millburn. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Municipal Income is 1.36 times less risky than Catalyst/millburn. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Catalystmillburn Hedge Strategy is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 3,854 in Catalystmillburn Hedge Strategy on October 21, 2024 and sell it today you would earn a total of 151.00 from holding Catalystmillburn Hedge Strategy or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Invesco Municipal Income |
| Catalystmillburn Hedge |
Invesco Municipal and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Catalyst/millburn
The main advantage of trading using opposite Invesco Municipal and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Catalyst/millburn 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 Catalyst/millburn will offset losses from the drop in Catalyst/millburn's long position.| Invesco Municipal vs. Catalystmillburn Hedge Strategy | Invesco Municipal vs. Saat Defensive Strategy | Invesco Municipal vs. Virtus Multi Strategy Target | Invesco Municipal vs. Inverse Nasdaq 100 Strategy |
| Catalyst/millburn vs. Lord Abbett Diversified | Catalyst/millburn vs. Wilmington Diversified Income | Catalyst/millburn vs. Delaware Limited Term Diversified | Catalyst/millburn vs. Madison Diversified Income |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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