Correlation Between Invesco Energy and Acm Dynamic

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

By analyzing existing cross correlation between Invesco Energy Fund and Acm Dynamic Opportunity, you can compare the effects of market volatilities on Invesco Energy and Acm Dynamic 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 Energy with a short position of Acm Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Acm Dynamic.

Diversification Opportunities for Invesco Energy and Acm Dynamic

0.11

Correlation Coefficient

Invesco Energy  Acm Dynamic

Average diversification

The 3 months correlation between Invesco and Acm is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Energy Fund and Acm Dynamic Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Dynamic Opportunity and Invesco Energy 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 Energy Fund are associated (or correlated) with Acm Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Dynamic Opportunity has no effect on the direction of Invesco Energy i.e., Invesco Energy and Acm Dynamic go up and down completely randomly.

Pair Corralation between Invesco Energy and Acm Dynamic

Assuming the 90 days horizon Invesco Energy Fund is expected to generate 1.12 times more return on investment than Acm Dynamic. However, Invesco Energy is 1.12 times more volatile than Acm Dynamic Opportunity. It trades about 0.14 of its potential returns per unit of risk. Acm Dynamic Opportunity is currently generating about -0.12 per unit of risk. If you would invest  2,315  in Invesco Energy Fund on December 28, 2024 and sell it today you would earn a total of  221.00  from holding Invesco Energy Fund or generate 9.55% return on investment over 90 days.

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

Invesco Energy Fund  vs.  Acm Dynamic Opportunity

Invesco Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Energy Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Invesco Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Acm Dynamic Opportunity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acm Dynamic Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Invesco Energy and Acm Dynamic

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

The idea behind Invesco Energy Fund and Acm Dynamic Opportunity 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.