Correlation Between Invesco Health and Amundi Treasury
Can any of the company-specific risk be diversified away by investing in both Invesco Health and Amundi Treasury 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 Health and Amundi Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Health Care and Amundi Treasury Bond, you can compare the effects of market volatilities on Invesco Health and Amundi Treasury 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 Health with a short position of Amundi Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Health and Amundi Treasury.
Diversification Opportunities for Invesco Health and Amundi Treasury
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Amundi is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Health Care and Amundi Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Treasury Bond and Invesco Health 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 Health Care are associated (or correlated) with Amundi Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Treasury Bond has no effect on the direction of Invesco Health i.e., Invesco Health and Amundi Treasury go up and down completely randomly.
Pair Corralation between Invesco Health and Amundi Treasury
Assuming the 90 days trading horizon Invesco Health Care is expected to generate 0.86 times more return on investment than Amundi Treasury. However, Invesco Health Care is 1.16 times less risky than Amundi Treasury. It trades about -0.09 of its potential returns per unit of risk. Amundi Treasury Bond is currently generating about -0.11 per unit of risk. If you would invest 74,404 in Invesco Health Care on September 6, 2024 and sell it today you would lose (3,060) from holding Invesco Health Care or give up 4.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Invesco Health Care vs. Amundi Treasury Bond
Performance |
Timeline |
Invesco Health Care |
Amundi Treasury Bond |
Invesco Health and Amundi Treasury Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco Health and Amundi Treasury
The main advantage of trading using opposite Invesco Health and Amundi Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Health position performs unexpectedly, Amundi Treasury 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 Amundi Treasury will offset losses from the drop in Amundi Treasury's long position.The idea behind Invesco Health Care and Amundi Treasury Bond 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.Amundi Treasury vs. Amundi EUR High | Amundi Treasury vs. Amundi Index Solutions | Amundi Treasury vs. Amundi MSCI Pacific | Amundi Treasury vs. Amundi MSCI Europe |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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