Correlation Between Invesco Trust and GreenBank Capital

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

Diversification Opportunities for Invesco Trust and GreenBank Capital

-0.36

Correlation Coefficient

Invesco Trust  GreenBank Capital

Very good diversification

The 3 months correlation between Invesco and GreenBank is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and GreenBank Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenBank Capital 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 GreenBank Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenBank Capital has no effect on the direction of Invesco Trust i.e., Invesco Trust and GreenBank Capital go up and down completely randomly.

Pair Corralation between Invesco Trust and GreenBank Capital

Considering the 90-day investment horizon Invesco Trust is expected to generate 286.85 times less return on investment than GreenBank Capital. But when comparing it to its historical volatility, Invesco Trust For is 51.53 times less risky than GreenBank Capital. It trades about 0.03 of its potential returns per unit of risk. GreenBank Capital is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.33  in GreenBank Capital on December 29, 2024 and sell it today you would earn a total of  0.12  from holding GreenBank Capital or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Invesco Trust For  vs.  GreenBank Capital

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.

GreenBank Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GreenBank Capital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, GreenBank Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Trust and GreenBank Capital

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

The idea behind Invesco Trust For and GreenBank Capital 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.

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.