Correlation Between Invesco Global and Invesco Quantitative

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

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

Diversification Opportunities for Invesco Global and Invesco Quantitative

0.79

Correlation Coefficient

Invesco Global  Invesco Quantitative

Poor diversification

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

Pair Corralation between Invesco Global and Invesco Quantitative

Assuming the 90 days trading horizon Invesco Global Buyback is expected to generate 0.98 times more return on investment than Invesco Quantitative. However, Invesco Global Buyback is 1.02 times less risky than Invesco Quantitative. It trades about 0.42 of its potential returns per unit of risk. Invesco Quantitative Strats is currently generating about 0.1 per unit of risk. If you would invest  5,144  in Invesco Global Buyback on October 23, 2024 and sell it today you would earn a total of  232.00  from holding Invesco Global Buyback or generate 4.51% return on investment over 90 days.

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

Invesco Global Buyback  vs.  Invesco Quantitative Strats

Invesco Global Buyback

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Global Buyback are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Invesco Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Invesco Quantitative

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Quantitative Strats are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Invesco Quantitative is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Invesco Global and Invesco Quantitative

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

The idea behind Invesco Global Buyback and Invesco Quantitative Strats 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.