Correlation Between Invesco High and Noah Holdings

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

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

Diversification Opportunities for Invesco High and Noah Holdings

0.0

Correlation Coefficient

Invesco High  Noah Holdings

Pay attention - limited upside

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

Pair Corralation between Invesco High and Noah Holdings

If you would invest (100.00) in Invesco High Income on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Invesco High Income or generate -100.0% return on investment over 90 days.

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

Invesco High Income  vs.  Noah Holdings

Invesco High Income

Risk-Adjusted Performance

Very Weak

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

Noah Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Noah Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Invesco High and Noah Holdings

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

The idea behind Invesco High Income and Noah Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.