Correlation Between American Funds and Invesco Peak
Can any of the company-specific risk be diversified away by investing in both American Funds and Invesco Peak 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 American Funds and Invesco Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2050 and Invesco Peak Retirement, you can compare the effects of market volatilities on American Funds and Invesco Peak 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 American Funds with a short position of Invesco Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Invesco Peak.
Diversification Opportunities for American Funds and Invesco Peak
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Invesco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2050 and Invesco Peak Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Peak Retirement and American Funds 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 American Funds 2050 are associated (or correlated) with Invesco Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Peak Retirement has no effect on the direction of American Funds i.e., American Funds and Invesco Peak go up and down completely randomly.
Pair Corralation between American Funds and Invesco Peak
If you would invest 2,132 in American Funds 2050 on September 25, 2024 and sell it today you would earn a total of 15.00 from holding American Funds 2050 or generate 0.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 1.59% |
Values | Daily Returns |
American Funds 2050 vs. Invesco Peak Retirement
Performance |
Timeline |
American Funds 2050 |
Invesco Peak Retirement |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
American Funds and Invesco Peak Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Funds and Invesco Peak
The main advantage of trading using opposite American Funds and Invesco Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Invesco Peak 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 Peak will offset losses from the drop in Invesco Peak's long position.American Funds vs. American Funds 2055 | American Funds vs. American Funds 2045 | American Funds vs. American Funds 2040 | American Funds vs. American Funds 2035 |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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