Correlation Between Ab Global and Invesco Core

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

By analyzing existing cross correlation between Ab Global Bond and Invesco E Plus, you can compare the effects of market volatilities on Ab Global and Invesco Core 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 Ab Global with a short position of Invesco Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Invesco Core.

Diversification Opportunities for Ab Global and Invesco Core

0.79

Correlation Coefficient

Ab Global  Invesco Core

Poor diversification

The 3 months correlation between ANAGX and Invesco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond and Invesco E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco E Plus and Ab Global 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 Ab Global Bond are associated (or correlated) with Invesco Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco E Plus has no effect on the direction of Ab Global i.e., Ab Global and Invesco Core go up and down completely randomly.

Pair Corralation between Ab Global and Invesco Core

Assuming the 90 days horizon Ab Global is expected to generate 4.93 times less return on investment than Invesco Core. But when comparing it to its historical volatility, Ab Global Bond is 1.23 times less risky than Invesco Core. It trades about 0.01 of its potential returns per unit of risk. Invesco E Plus is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  919.00  in Invesco E Plus on December 5, 2024 and sell it today you would earn a total of  7.00  from holding Invesco E Plus or generate 0.76% return on investment over 90 days.

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

Ab Global Bond  vs.  Invesco E Plus

Ab Global Bond

Risk-Adjusted Performance

Very Weak

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

Invesco E Plus

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco E Plus are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Invesco Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Global and Invesco Core

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

The idea behind Ab Global Bond and Invesco E Plus 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.