Correlation Between Invesco International and Invesco Multi

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

By analyzing existing cross correlation between Invesco International BuyBack and Invesco Multi Strategy Alternative, you can compare the effects of market volatilities on Invesco International and Invesco Multi 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 International with a short position of Invesco Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco International and Invesco Multi.

Diversification Opportunities for Invesco International and Invesco Multi

-0.63

Correlation Coefficient

Invesco International  Invesco Multi

Excellent diversification

The 3 months correlation between Invesco and Invesco is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Invesco International BuyBack and Invesco Multi Strategy Alterna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Multi Strategy and Invesco International 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 International BuyBack are associated (or correlated) with Invesco Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Multi Strategy has no effect on the direction of Invesco International i.e., Invesco International and Invesco Multi go up and down completely randomly.

Pair Corralation between Invesco International and Invesco Multi

Given the investment horizon of 90 days Invesco International BuyBack is expected to generate 3.18 times more return on investment than Invesco Multi. However, Invesco International is 3.18 times more volatile than Invesco Multi Strategy Alternative. It trades about 0.06 of its potential returns per unit of risk. Invesco Multi Strategy Alternative is currently generating about 0.09 per unit of risk. If you would invest  3,273  in Invesco International BuyBack on September 30, 2024 and sell it today you would earn a total of  688.00  from holding Invesco International BuyBack or generate 21.02% return on investment over 90 days.

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

Invesco International BuyBack  vs.  Invesco Multi Strategy Alterna

Invesco International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco International BuyBack has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward-looking signals, Invesco International is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Invesco Multi Strategy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Multi Strategy Alternative are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Invesco Multi is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco International and Invesco Multi

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

The idea behind Invesco International BuyBack and Invesco Multi Strategy Alternative 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..