Correlation Between Invesco Equally-weighted and Invesco Comstock

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

By analyzing existing cross correlation between Invesco Equally Weighted Sp and Invesco Stock Fund, you can compare the effects of market volatilities on Invesco Equally-weighted and Invesco Comstock 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 Equally-weighted with a short position of Invesco Comstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Equally-weighted and Invesco Comstock.

Diversification Opportunities for Invesco Equally-weighted and Invesco Comstock

0.67

Correlation Coefficient

Invesco Equally-weighted  Invesco Comstock

Poor diversification

The 3 months correlation between Invesco and Invesco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Equally Weighted Sp and Invesco Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Comstock and Invesco Equally-weighted 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 Equally Weighted Sp are associated (or correlated) with Invesco Comstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Comstock has no effect on the direction of Invesco Equally-weighted i.e., Invesco Equally-weighted and Invesco Comstock go up and down completely randomly.

Pair Corralation between Invesco Equally-weighted and Invesco Comstock

Assuming the 90 days horizon Invesco Equally-weighted is expected to generate 1.1 times less return on investment than Invesco Comstock. In addition to that, Invesco Equally-weighted is 1.01 times more volatile than Invesco Stock Fund. It trades about 0.05 of its total potential returns per unit of risk. Invesco Stock Fund is currently generating about 0.06 per unit of volatility. If you would invest  2,447  in Invesco Stock Fund on December 2, 2024 and sell it today you would earn a total of  588.00  from holding Invesco Stock Fund or generate 24.03% return on investment over 90 days.

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

Invesco Equally Weighted Sp  vs.  Invesco Stock Fund

Invesco Equally-weighted

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Equally Weighted Sp has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Invesco Comstock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Stock Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Invesco Equally-weighted and Invesco Comstock

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

The idea behind Invesco Equally Weighted Sp and Invesco Stock Fund 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.