Correlation Between Invesco High and VHAI

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Invesco High and VHAI 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 High and VHAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco High Yield and VHAI, you can compare the effects of market volatilities on Invesco High and VHAI 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 High with a short position of VHAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and VHAI.

Diversification Opportunities for Invesco High and VHAI

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Invesco and VHAI is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Yield and VHAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VHAI and Invesco High 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 High Yield are associated (or correlated) with VHAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VHAI has no effect on the direction of Invesco High i.e., Invesco High and VHAI go up and down completely randomly.

Pair Corralation between Invesco High and VHAI

Assuming the 90 days horizon Invesco High Yield is expected to generate 0.02 times more return on investment than VHAI. However, Invesco High Yield is 58.08 times less risky than VHAI. It trades about 0.15 of its potential returns per unit of risk. VHAI is currently generating about -0.1 per unit of risk. If you would invest  357.00  in Invesco High Yield on September 2, 2024 and sell it today you would earn a total of  2.00  from holding Invesco High Yield or generate 0.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Invesco High Yield  vs.  VHAI

 Performance 
       Timeline  
Invesco High Yield 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco High Yield are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Invesco High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
VHAI 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days VHAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Invesco High and VHAI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Invesco High and VHAI

The main advantage of trading using opposite Invesco High and VHAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High position performs unexpectedly, VHAI 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 VHAI will offset losses from the drop in VHAI's long position.
The idea behind Invesco High Yield and VHAI 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.
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
CEOs Directory
Screen CEOs from public companies around the world
Insider Screener
Find insiders across different sectors to evaluate their impact on performance