Correlation Between Invesco Advantage and Gouverneur Bancorp

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

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

Diversification Opportunities for Invesco Advantage and Gouverneur Bancorp

-0.21

Correlation Coefficient

Invesco Advantage  Gouverneur Bancorp

Very good diversification

The 3 months correlation between Invesco and Gouverneur is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and Gouverneur Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gouverneur Bancorp and Invesco Advantage 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 Advantage MIT are associated (or correlated) with Gouverneur Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gouverneur Bancorp has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and Gouverneur Bancorp go up and down completely randomly.

Pair Corralation between Invesco Advantage and Gouverneur Bancorp

Considering the 90-day investment horizon Invesco Advantage is expected to generate 50.19 times less return on investment than Gouverneur Bancorp. But when comparing it to its historical volatility, Invesco Advantage MIT is 3.69 times less risky than Gouverneur Bancorp. It trades about 0.02 of its potential returns per unit of risk. Gouverneur Bancorp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  993.00  in Gouverneur Bancorp on September 13, 2024 and sell it today you would earn a total of  282.00  from holding Gouverneur Bancorp or generate 28.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco Advantage MIT  vs.  Gouverneur Bancorp

Invesco Advantage MIT

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Advantage MIT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking signals, Invesco Advantage is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Gouverneur Bancorp

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gouverneur Bancorp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gouverneur Bancorp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Advantage and Gouverneur Bancorp

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

The idea behind Invesco Advantage MIT and Gouverneur Bancorp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.