Correlation Between Invesco Trust and Blackstar Enterprise

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

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

Diversification Opportunities for Invesco Trust and Blackstar Enterprise

-0.18

Correlation Coefficient

Invesco Trust  Blackstar Enterprise

Good diversification

The 3 months correlation between Invesco and Blackstar is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Blackstar Enterprise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstar Enterprise and Invesco Trust 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 Trust For are associated (or correlated) with Blackstar Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstar Enterprise has no effect on the direction of Invesco Trust i.e., Invesco Trust and Blackstar Enterprise go up and down completely randomly.

Pair Corralation between Invesco Trust and Blackstar Enterprise

Considering the 90-day investment horizon Invesco Trust is expected to generate 70.37 times less return on investment than Blackstar Enterprise. But when comparing it to its historical volatility, Invesco Trust For is 20.77 times less risky than Blackstar Enterprise. It trades about 0.03 of its potential returns per unit of risk. Blackstar Enterprise Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Blackstar Enterprise Group on December 29, 2024 and sell it today you would earn a total of  0.01  from holding Blackstar Enterprise Group or generate 20.0% return on investment over 90 days.

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

Invesco Trust For  vs.  Blackstar Enterprise Group

Invesco Trust For

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Trust For are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Invesco Trust is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Blackstar Enterprise

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstar Enterprise Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Blackstar Enterprise demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Trust and Blackstar Enterprise

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

The idea behind Invesco Trust For and Blackstar Enterprise Group 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.