Correlation Between Invesco High and Blackrock Munivest

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

By analyzing existing cross correlation between Invesco High Income and Blackrock Munivest, you can compare the effects of market volatilities on Invesco High and Blackrock Munivest 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 High with a short position of Blackrock Munivest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Blackrock Munivest.

Diversification Opportunities for Invesco High and Blackrock Munivest

-0.6

Correlation Coefficient

Invesco High  Blackrock Munivest

Excellent diversification

The 3 months correlation between Invesco and Blackrock is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Blackrock Munivest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Munivest and Invesco High 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 High Income are associated (or correlated) with Blackrock Munivest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Munivest has no effect on the direction of Invesco High i.e., Invesco High and Blackrock Munivest go up and down completely randomly.

Pair Corralation between Invesco High and Blackrock Munivest

Given the investment horizon of 90 days Invesco High Income is expected to generate 0.59 times more return on investment than Blackrock Munivest. However, Invesco High Income is 1.7 times less risky than Blackrock Munivest. It trades about 0.15 of its potential returns per unit of risk. Blackrock Munivest is currently generating about 0.03 per unit of risk. If you would invest  729.00  in Invesco High Income on August 30, 2024 and sell it today you would earn a total of  25.00  from holding Invesco High Income or generate 3.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Invesco High Income  vs.  Blackrock Munivest

Invesco High Income

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco High Income are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Invesco High is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Munivest

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Munivest are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of comparatively stable basic indicators, Blackrock Munivest is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco High and Blackrock Munivest

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

The idea behind Invesco High Income and Blackrock Munivest 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.