Correlation Between Invesco Technology and Mainstay High
Can any of the company-specific risk be diversified away by investing in both Invesco Technology and Mainstay High 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 Technology and Mainstay High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Technology Fund and Mainstay High Yield, you can compare the effects of market volatilities on Invesco Technology and Mainstay High 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 Technology with a short position of Mainstay High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Technology and Mainstay High.
Diversification Opportunities for Invesco Technology and Mainstay High
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Mainstay is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Technology Fund and Mainstay High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay High Yield and Invesco Technology 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 Technology Fund are associated (or correlated) with Mainstay High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay High Yield has no effect on the direction of Invesco Technology i.e., Invesco Technology and Mainstay High go up and down completely randomly.
Pair Corralation between Invesco Technology and Mainstay High
Assuming the 90 days horizon Invesco Technology Fund is expected to generate 6.53 times more return on investment than Mainstay High. However, Invesco Technology is 6.53 times more volatile than Mainstay High Yield. It trades about 0.08 of its potential returns per unit of risk. Mainstay High Yield is currently generating about 0.13 per unit of risk. If you would invest 3,761 in Invesco Technology Fund on October 10, 2024 and sell it today you would earn a total of 2,835 from holding Invesco Technology Fund or generate 75.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Invesco Technology Fund vs. Mainstay High Yield
Performance |
Timeline |
Invesco Technology |
Mainstay High Yield |
Invesco Technology and Mainstay High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco Technology and Mainstay High
The main advantage of trading using opposite Invesco Technology and Mainstay High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Technology position performs unexpectedly, Mainstay High 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 Mainstay High will offset losses from the drop in Mainstay High's long position.Invesco Technology vs. Asg Managed Futures | Invesco Technology vs. Ab Bond Inflation | Invesco Technology vs. Lord Abbett Inflation | Invesco Technology vs. Ab Bond Inflation |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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