Correlation Between Invesco California and Dws Strategic

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

By analyzing existing cross correlation between Invesco California Value and Dws Strategic Municipal, you can compare the effects of market volatilities on Invesco California and Dws Strategic 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 California with a short position of Dws Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco California and Dws Strategic.

Diversification Opportunities for Invesco California and Dws Strategic

-0.15

Correlation Coefficient

Invesco California  Dws Strategic

Good diversification

The 3 months correlation between Invesco and Dws is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Invesco California Value and Dws Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dws Strategic Municipal and Invesco California 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 California Value are associated (or correlated) with Dws Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dws Strategic Municipal has no effect on the direction of Invesco California i.e., Invesco California and Dws Strategic go up and down completely randomly.

Pair Corralation between Invesco California and Dws Strategic

If you would invest  1,068  in Invesco California Value on October 13, 2024 and sell it today you would earn a total of  44.00  from holding Invesco California Value or generate 4.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Invesco California Value  vs.  Dws Strategic Municipal

Invesco California Value

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco California Value are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Invesco California is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Dws Strategic Municipal

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Dws Strategic Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of very inconsistent basic indicators, Dws Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco California and Dws Strategic

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

The idea behind Invesco California Value and Dws Strategic Municipal 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 Global Correlations module to find global opportunities by holding instruments from different markets.