Correlation Between Invesco Disciplined and Aristotle Funds

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

By analyzing existing cross correlation between Invesco Disciplined Equity and Aristotle Funds Series, you can compare the effects of market volatilities on Invesco Disciplined and Aristotle Funds 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 Disciplined with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Disciplined and Aristotle Funds.

Diversification Opportunities for Invesco Disciplined and Aristotle Funds

0.71

Correlation Coefficient

Invesco Disciplined  Aristotle Funds

Poor diversification

The 3 months correlation between Invesco and Aristotle is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Disciplined Equity and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Invesco Disciplined 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 Disciplined Equity are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Invesco Disciplined i.e., Invesco Disciplined and Aristotle Funds go up and down completely randomly.

Pair Corralation between Invesco Disciplined and Aristotle Funds

If you would invest  2,632  in Invesco Disciplined Equity on October 24, 2024 and sell it today you would earn a total of  555.00  from holding Invesco Disciplined Equity or generate 21.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Invesco Disciplined Equity  vs.  Aristotle Funds Series

Invesco Disciplined

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aristotle Funds Series

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Aristotle Funds Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Aristotle Funds 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 Disciplined and Aristotle Funds

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

The idea behind Invesco Disciplined Equity and Aristotle Funds Series 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 Transaction History module to view history of all your transactions and understand their impact on performance.