Correlation Between Invesco Trust and Eagle Financial

Can any of the company-specific risk be diversified away by investing in both Invesco Trust and Eagle Financial 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 Eagle Financial 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 Eagle Financial Services, you can compare the effects of market volatilities on Invesco Trust and Eagle Financial 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 Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and Eagle Financial.

Diversification Opportunities for Invesco Trust and Eagle Financial

-0.76

Correlation Coefficient

Invesco Trust  Eagle Financial

Pay attention - limited upside

The 3 months correlation between Invesco and Eagle is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services 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 Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Invesco Trust i.e., Invesco Trust and Eagle Financial go up and down completely randomly.

Pair Corralation between Invesco Trust and Eagle Financial

Considering the 90-day investment horizon Invesco Trust For is expected to generate 0.84 times more return on investment than Eagle Financial. However, Invesco Trust For is 1.19 times less risky than Eagle Financial. It trades about 0.06 of its potential returns per unit of risk. Eagle Financial Services is currently generating about -0.24 per unit of risk. If you would invest  1,033  in Invesco Trust For on December 28, 2024 and sell it today you would earn a total of  24.00  from holding Invesco Trust For or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	78.33%
Values	Daily Returns

Invesco Trust For  vs.  Eagle Financial Services

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 4 (%) 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.

Eagle Financial Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Invesco Trust and Eagle Financial

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

The idea behind Invesco Trust For and Eagle Financial Services 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.