Correlation Between Invesco Municipal and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Aim 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 Municipal and Aim Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Income and Aim Investment Securities, you can compare the effects of market volatilities on Invesco Municipal and Aim 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 Municipal with a short position of Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Aim Investment.
Diversification Opportunities for Invesco Municipal and Aim Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Aim is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income and Aim Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Securities and Invesco Municipal 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 Municipal Income are associated (or correlated) with Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Securities has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Aim Investment go up and down completely randomly.
Pair Corralation between Invesco Municipal and Aim Investment
Assuming the 90 days horizon Invesco Municipal Income is expected to generate 0.59 times more return on investment than Aim Investment. However, Invesco Municipal Income is 1.71 times less risky than Aim Investment. It trades about -0.08 of its potential returns per unit of risk. Aim Investment Securities is currently generating about -0.09 per unit of risk. If you would invest 1,210 in Invesco Municipal Income on September 25, 2024 and sell it today you would lose (18.00) from holding Invesco Municipal Income or give up 1.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Invesco Municipal Income vs. Aim Investment Securities
Performance |
Timeline |
Invesco Municipal Income |
Aim Investment Securities |
Invesco Municipal and Aim Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco Municipal and Aim Investment
The main advantage of trading using opposite Invesco Municipal and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Aim 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 Aim Investment will offset losses from the drop in Aim Investment's long position.Invesco Municipal vs. Western Asset Diversified | Invesco Municipal vs. Wealthbuilder Conservative Allocation | Invesco Municipal vs. Lord Abbett Diversified | Invesco Municipal vs. Stone Ridge Diversified |
Aim Investment vs. Invesco Municipal Income | Aim Investment vs. Invesco Municipal Income | Aim Investment vs. Invesco Municipal Income | Aim Investment vs. Oppenheimer Rising Dividends |
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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