Correlation Between Guidemark Large and Invesco Municipal

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

By analyzing existing cross correlation between Guidemark Large Cap and Invesco Municipal Income, you can compare the effects of market volatilities on Guidemark Large and Invesco Municipal 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 Guidemark Large with a short position of Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Invesco Municipal.

Diversification Opportunities for Guidemark Large and Invesco Municipal

0.0

Correlation Coefficient

Guidemark Large  Invesco Municipal

Pay attention - limited upside

The 3 months correlation between Guidemark and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income and Guidemark Large 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 Guidemark Large Cap are associated (or correlated) with Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Guidemark Large i.e., Guidemark Large and Invesco Municipal go up and down completely randomly.

Pair Corralation between Guidemark Large and Invesco Municipal

If you would invest  1,154  in Guidemark Large Cap on September 21, 2024 and sell it today you would earn a total of  2.00  from holding Guidemark Large Cap or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Guidemark Large Cap  vs.  Invesco Municipal Income

Guidemark Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Invesco Municipal Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Guidemark Large and Invesco Municipal

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

The idea behind Guidemark Large Cap and Invesco Municipal Income 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.