Correlation Between Invesco Advantage and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Invesco Advantage and MFS Investment 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 MFS Investment 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 MFS Investment Grade, you can compare the effects of market volatilities on Invesco Advantage and MFS Investment 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 MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Advantage and MFS Investment.
Diversification Opportunities for Invesco Advantage and MFS Investment
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and MFS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade 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 MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and MFS Investment go up and down completely randomly.
Pair Corralation between Invesco Advantage and MFS Investment
Considering the 90-day investment horizon Invesco Advantage MIT is expected to under-perform the MFS Investment. In addition to that, Invesco Advantage is 1.18 times more volatile than MFS Investment Grade. It trades about -0.01 of its total potential returns per unit of risk. MFS Investment Grade is currently generating about 0.0 per unit of volatility. If you would invest 814.00 in MFS Investment Grade on December 1, 2024 and sell it today you would lose (1.00) from holding MFS Investment Grade or give up 0.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Invesco Advantage MIT vs. MFS Investment Grade
Performance |
Timeline |
Invesco Advantage MIT |
MFS Investment Grade |
Invesco Advantage and MFS Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco Advantage and MFS Investment
The main advantage of trading using opposite Invesco Advantage and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Advantage position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.Invesco Advantage vs. Invesco Quality Municipal | Invesco Advantage vs. Invesco California Value | Invesco Advantage vs. DWS Municipal Income | Invesco Advantage vs. Invesco Trust For |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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