Correlation Between Invesco Balanced and Acr Multi

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

By analyzing existing cross correlation between Invesco Balanced Risk Allocation and Acr Multi Strategy Quality, you can compare the effects of market volatilities on Invesco Balanced and Acr Multi 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 Balanced with a short position of Acr Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Balanced and Acr Multi.

Diversification Opportunities for Invesco Balanced and Acr Multi

0.87

Correlation Coefficient

Invesco Balanced  Acr Multi

Very poor diversification

The 3 months correlation between Invesco and Acr is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Balanced Risk Allocati and Acr Multi Strategy Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acr Multi Strategy and Invesco Balanced 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 Balanced Risk Allocation are associated (or correlated) with Acr Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acr Multi Strategy has no effect on the direction of Invesco Balanced i.e., Invesco Balanced and Acr Multi go up and down completely randomly.

Pair Corralation between Invesco Balanced and Acr Multi

Assuming the 90 days horizon Invesco Balanced Risk Allocation is expected to under-perform the Acr Multi. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Balanced Risk Allocation is 1.22 times less risky than Acr Multi. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Acr Multi Strategy Quality is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,234  in Acr Multi Strategy Quality on September 29, 2024 and sell it today you would earn a total of  350.00  from holding Acr Multi Strategy Quality or generate 28.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Invesco Balanced Risk Allocati  vs.  Acr Multi Strategy Quality

Invesco Balanced Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Balanced Risk Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Acr Multi Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acr Multi Strategy Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Invesco Balanced and Acr Multi

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

The idea behind Invesco Balanced Risk Allocation and Acr Multi Strategy Quality 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.