Correlation Between Invesco Advantage and CBH

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

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

Diversification Opportunities for Invesco Advantage and CBH

0.0

Correlation Coefficient

Invesco Advantage  CBH

Pay attention - limited upside

The 3 months correlation between Invesco and CBH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Invesco Advantage 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 Advantage MIT are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and CBH go up and down completely randomly.

Pair Corralation between Invesco Advantage and CBH

If you would invest  850.00  in Invesco Advantage MIT on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Invesco Advantage MIT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Invesco Advantage MIT  vs.  CBH

Invesco Advantage MIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Advantage MIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking signals, Invesco Advantage is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

CBH

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Invesco Advantage and CBH

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

The idea behind Invesco Advantage MIT and CBH 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.