Correlation Between Invesco Senior and IShares 0

Can any of the company-specific risk be diversified away by investing in both Invesco Senior and IShares 0 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 Senior and IShares 0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Invesco Senior Loan and iShares 0 5 Year, you can compare the effects of market volatilities on Invesco Senior and IShares 0 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 Senior with a short position of IShares 0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Senior and IShares 0.

Diversification Opportunities for Invesco Senior and IShares 0

0.51

Correlation Coefficient

Invesco Senior  IShares 0

Very weak diversification

The 3 months correlation between Invesco and IShares is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Senior Loan and iShares 0 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 0 5 and Invesco Senior 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 Senior Loan are associated (or correlated) with IShares 0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 0 5 has no effect on the direction of Invesco Senior i.e., Invesco Senior and IShares 0 go up and down completely randomly.

Pair Corralation between Invesco Senior and IShares 0

Given the investment horizon of 90 days Invesco Senior is expected to generate 9.29 times less return on investment than IShares 0. But when comparing it to its historical volatility, Invesco Senior Loan is 1.99 times less risky than IShares 0. It trades about 0.01 of its potential returns per unit of risk. iShares 0 5 Year is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,212  in iShares 0 5 Year on December 29, 2024 and sell it today you would earn a total of  40.00  from holding iShares 0 5 Year or generate 0.95% return on investment over 90 days.

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

Invesco Senior Loan  vs.  iShares 0 5 Year

Invesco Senior Loan

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Senior Loan are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Invesco Senior is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

iShares 0 5

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares 0 5 Year are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, IShares 0 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Invesco Senior and IShares 0

The main advantage of trading using opposite Invesco Senior and IShares 0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Senior position performs unexpectedly, IShares 0 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 IShares 0 will offset losses from the drop in IShares 0's long position.

The idea behind Invesco Senior Loan and iShares 0 5 Year 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.