Correlation Between Invesco BulletShares and Rivernorth Opportunistic

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

By analyzing existing cross correlation between Invesco BulletShares 2027 and Rivernorth Opportunistic Municipalome, you can compare the effects of market volatilities on Invesco BulletShares and Rivernorth Opportunistic 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 BulletShares with a short position of Rivernorth Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco BulletShares and Rivernorth Opportunistic.

Diversification Opportunities for Invesco BulletShares and Rivernorth Opportunistic

0.04

Correlation Coefficient

Invesco BulletShares  Rivernorth Opportunistic

Significant diversification

The 3 months correlation between Invesco and Rivernorth is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Invesco BulletShares 2027 and Rivernorth Opportunistic Munic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivernorth Opportunistic and Invesco BulletShares 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 BulletShares 2027 are associated (or correlated) with Rivernorth Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivernorth Opportunistic has no effect on the direction of Invesco BulletShares i.e., Invesco BulletShares and Rivernorth Opportunistic go up and down completely randomly.

Pair Corralation between Invesco BulletShares and Rivernorth Opportunistic

Given the investment horizon of 90 days Invesco BulletShares 2027 is expected to generate 0.31 times more return on investment than Rivernorth Opportunistic. However, Invesco BulletShares 2027 is 3.24 times less risky than Rivernorth Opportunistic. It trades about 0.21 of its potential returns per unit of risk. Rivernorth Opportunistic Municipalome is currently generating about 0.03 per unit of risk. If you would invest  2,220  in Invesco BulletShares 2027 on September 12, 2024 and sell it today you would earn a total of  45.00  from holding Invesco BulletShares 2027 or generate 2.03% return on investment over 90 days.

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

Invesco BulletShares 2027  vs.  Rivernorth Opportunistic Munic

Invesco BulletShares 2027

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco BulletShares 2027 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward-looking indicators, Invesco BulletShares is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Rivernorth Opportunistic

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunistic Municipalome are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong primary indicators, Rivernorth Opportunistic is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Invesco BulletShares and Rivernorth Opportunistic

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

The idea behind Invesco BulletShares 2027 and Rivernorth Opportunistic Municipalome 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.