Correlation Between Invesco High and Pimco New

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

Diversification Opportunities for Invesco High and Pimco New

-0.71

Correlation Coefficient

Invesco High  Pimco New

Pay attention - limited upside

The 3 months correlation between Invesco and Pimco is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income and Pimco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco New York 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 Pimco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco New York has no effect on the direction of Invesco High i.e., Invesco High and Pimco New go up and down completely randomly.

Pair Corralation between Invesco High and Pimco New

Given the investment horizon of 90 days Invesco High Income is expected to generate 0.22 times more return on investment than Pimco New. However, Invesco High Income is 4.49 times less risky than Pimco New. It trades about 0.31 of its potential returns per unit of risk. Pimco New York is currently generating about -0.24 per unit of risk. If you would invest  751.00  in Invesco High Income on September 13, 2024 and sell it today you would earn a total of  3.00  from holding Invesco High Income or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	66.67%
Values	Daily Returns

Invesco High Income  vs.  Pimco New York

Invesco High Income

Risk-Adjusted Performance

0 of 100

Good

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.

Pimco New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco New York has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Pimco New is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Invesco High and Pimco New

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

The idea behind Invesco High Income and Pimco New York 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.