Correlation Between Invesco Balanced and Equinox Campbell

Can any of the company-specific risk be diversified away by investing in both Invesco Balanced and Equinox Campbell 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 Balanced and Equinox Campbell into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Invesco Balanced Risk Allocation and Equinox Campbell Strategy, you can compare the effects of market volatilities on Invesco Balanced and Equinox Campbell 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 Balanced with a short position of Equinox Campbell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Balanced and Equinox Campbell.

Diversification Opportunities for Invesco Balanced and Equinox Campbell

-0.14

Correlation Coefficient

Invesco Balanced  Equinox Campbell

Good diversification

The 3 months correlation between Invesco and Equinox is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Balanced Risk Allocati and Equinox Campbell Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Campbell Strategy and Invesco Balanced 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 Balanced Risk Allocation are associated (or correlated) with Equinox Campbell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Campbell Strategy has no effect on the direction of Invesco Balanced i.e., Invesco Balanced and Equinox Campbell go up and down completely randomly.

Pair Corralation between Invesco Balanced and Equinox Campbell

Assuming the 90 days horizon Invesco Balanced Risk Allocation is expected to under-perform the Equinox Campbell. In addition to that, Invesco Balanced is 2.84 times more volatile than Equinox Campbell Strategy. It trades about -0.18 of its total potential returns per unit of risk. Equinox Campbell Strategy is currently generating about 0.02 per unit of volatility. If you would invest  896.00  in Equinox Campbell Strategy on September 26, 2024 and sell it today you would earn a total of  3.00  from holding Equinox Campbell Strategy or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco Balanced Risk Allocati  vs.  Equinox Campbell Strategy

Invesco Balanced Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Balanced Risk Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Equinox Campbell Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equinox Campbell Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Equinox Campbell is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Balanced and Equinox Campbell

The main advantage of trading using opposite Invesco Balanced and Equinox Campbell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Balanced position performs unexpectedly, Equinox Campbell 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 Equinox Campbell will offset losses from the drop in Equinox Campbell's long position.

The idea behind Invesco Balanced Risk Allocation and Equinox Campbell Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.