Correlation Between Invesco Energy and Clearbridge Energy

Can any of the company-specific risk be diversified away by investing in both Invesco Energy and Clearbridge Energy 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 Clearbridge Energy 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 Clearbridge Energy Mlp, you can compare the effects of market volatilities on Invesco Energy and Clearbridge Energy 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 Clearbridge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Energy and Clearbridge Energy.

Diversification Opportunities for Invesco Energy and Clearbridge Energy

0.0

Correlation Coefficient

Invesco Energy  Clearbridge Energy

Pay attention - limited upside

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

Pair Corralation between Invesco Energy and Clearbridge Energy

If you would invest  2,399  in Invesco Energy Fund on October 24, 2024 and sell it today you would earn a total of  132.00  from holding Invesco Energy Fund or generate 5.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	79.66%
Values	Daily Returns

Invesco Energy Fund  vs.  Clearbridge Energy Mlp

Invesco Energy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Energy Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Invesco Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Energy Mlp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Invesco Energy and Clearbridge Energy

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

The idea behind Invesco Energy Fund and Clearbridge Energy Mlp 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.