Correlation Between Invesco Trust and Fentura Financial

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

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

Diversification Opportunities for Invesco Trust and Fentura Financial

0.15

Correlation Coefficient

Invesco Trust  Fentura Financial

Average diversification

The 3 months correlation between Invesco and Fentura is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and Fentura Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fentura Financial and Invesco Trust 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 Trust For are associated (or correlated) with Fentura Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fentura Financial has no effect on the direction of Invesco Trust i.e., Invesco Trust and Fentura Financial go up and down completely randomly.

Pair Corralation between Invesco Trust and Fentura Financial

Considering the 90-day investment horizon Invesco Trust For is expected to under-perform the Fentura Financial. But the stock apears to be less risky and, when comparing its historical volatility, Invesco Trust For is 3.6 times less risky than Fentura Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Fentura Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  3,870  in Fentura Financial on September 12, 2024 and sell it today you would earn a total of  929.00  from holding Fentura Financial or generate 24.01% return on investment over 90 days.

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

Invesco Trust For  vs.  Fentura Financial

Invesco Trust For

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Trust For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Invesco Trust is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Fentura Financial

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fentura Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Fentura Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Trust and Fentura Financial

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

The idea behind Invesco Trust For and Fentura Financial 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.