Correlation Between Invesco Municipal and Oaktree Capital
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal and Oaktree Capital 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 Municipal and Oaktree Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Trust and Oaktree Capital Group, you can compare the effects of market volatilities on Invesco Municipal and Oaktree Capital 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 Municipal with a short position of Oaktree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Oaktree Capital.
Diversification Opportunities for Invesco Municipal and Oaktree Capital
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Oaktree is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Trust and Oaktree Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Capital Group and Invesco Municipal 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 Municipal Trust are associated (or correlated) with Oaktree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Capital Group has no effect on the direction of Invesco Municipal i.e., Invesco Municipal and Oaktree Capital go up and down completely randomly.
Pair Corralation between Invesco Municipal and Oaktree Capital
Considering the 90-day investment horizon Invesco Municipal Trust is expected to generate 0.61 times more return on investment than Oaktree Capital. However, Invesco Municipal Trust is 1.65 times less risky than Oaktree Capital. It trades about -0.12 of its potential returns per unit of risk. Oaktree Capital Group is currently generating about -0.11 per unit of risk. If you would invest 1,001 in Invesco Municipal Trust on September 25, 2024 and sell it today you would lose (47.00) from holding Invesco Municipal Trust or give up 4.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Invesco Municipal Trust vs. Oaktree Capital Group
Performance |
Timeline |
Invesco Municipal Trust |
Oaktree Capital Group |
Invesco Municipal and Oaktree Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco Municipal and Oaktree Capital
The main advantage of trading using opposite Invesco Municipal and Oaktree Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal position performs unexpectedly, Oaktree Capital 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 Oaktree Capital will offset losses from the drop in Oaktree Capital's long position.Invesco Municipal vs. Invesco Trust For | Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Municipal Opportunity | Invesco Municipal vs. MFS High Income |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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