Correlation Between Invesco Pacific and INVESCO 2

Can any of the company-specific risk be diversified away by investing in both Invesco Pacific and INVESCO 2 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 Pacific and INVESCO 2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Invesco Pacific Equity and INVESCO 2 BOND, you can compare the effects of market volatilities on Invesco Pacific and INVESCO 2 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 Pacific with a short position of INVESCO 2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Pacific and INVESCO 2.

Diversification Opportunities for Invesco Pacific and INVESCO 2

0.0

Correlation Coefficient

Invesco Pacific  INVESCO 2

Pay attention - limited upside

The 3 months correlation between Invesco and INVESCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Pacific Equity and INVESCO 2 BOND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVESCO 2 BOND and Invesco Pacific 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 Pacific Equity are associated (or correlated) with INVESCO 2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVESCO 2 BOND has no effect on the direction of Invesco Pacific i.e., Invesco Pacific and INVESCO 2 go up and down completely randomly.

Pair Corralation between Invesco Pacific and INVESCO 2

If you would invest (100.00) in INVESCO 2 BOND on September 16, 2024 and sell it today you would earn a total of  100.00  from holding INVESCO 2 BOND or generate -100.0% return on investment over 90 days.

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

Invesco Pacific Equity  vs.  INVESCO 2 BOND

Invesco Pacific Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Pacific Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Invesco Pacific is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

INVESCO 2 BOND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INVESCO 2 BOND has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, INVESCO 2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Pacific and INVESCO 2

The main advantage of trading using opposite Invesco Pacific and INVESCO 2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Pacific position performs unexpectedly, INVESCO 2 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 2 will offset losses from the drop in INVESCO 2's long position.

The idea behind Invesco Pacific Equity and INVESCO 2 BOND 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.