Correlation Between Invesco Multi and Invesco International

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

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

Diversification Opportunities for Invesco Multi and Invesco International

-0.5

Correlation Coefficient

Invesco Multi  Invesco International

Very good diversification

The 3 months correlation between Invesco and Invesco is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Multi Strategy Alterna and Invesco International BuyBack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International and Invesco Multi 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 Multi Strategy Alternative are associated (or correlated) with Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Invesco Multi i.e., Invesco Multi and Invesco International go up and down completely randomly.

Pair Corralation between Invesco Multi and Invesco International

Given the investment horizon of 90 days Invesco Multi Strategy Alternative is expected to generate 0.37 times more return on investment than Invesco International. However, Invesco Multi Strategy Alternative is 2.67 times less risky than Invesco International. It trades about 0.14 of its potential returns per unit of risk. Invesco International BuyBack is currently generating about -0.04 per unit of risk. If you would invest  2,076  in Invesco Multi Strategy Alternative on October 22, 2024 and sell it today you would earn a total of  58.00  from holding Invesco Multi Strategy Alternative or generate 2.79% return on investment over 90 days.

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

Invesco Multi Strategy Alterna  vs.  Invesco International BuyBack

Invesco Multi Strategy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Multi Strategy Alternative are ranked lower than 11 (%) 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.

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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Invesco Multi and Invesco International

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

The idea behind Invesco Multi Strategy Alternative and Invesco International BuyBack 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.