Correlation Between Invesco Trust and Invesco High

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

Diversification Opportunities for Invesco Trust and Invesco High

0.0

Correlation Coefficient

Invesco Trust  Invesco High

Pay attention - limited upside

The 3 months correlation between Invesco and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Invesco High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Income 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 Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Income has no effect on the direction of Invesco Trust i.e., Invesco Trust and Invesco High go up and down completely randomly.

Pair Corralation between Invesco Trust and Invesco High

If you would invest  1,038  in Invesco Trust For on December 2, 2024 and sell it today you would earn a total of  33.00  from holding Invesco Trust For or generate 3.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Invesco Trust For  vs.  Invesco High Income

Invesco Trust For

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Trust For has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Invesco High Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco High Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Invesco High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Trust and Invesco High

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

The idea behind Invesco Trust For and Invesco High Income 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.