Correlation Between Invesco Comstock and Smead Value
Can any of the company-specific risk be diversified away by investing in both Invesco Comstock and Smead Value 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 Comstock and Smead Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Stock Fund and Smead Value Fund, you can compare the effects of market volatilities on Invesco Comstock and Smead Value 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 Comstock with a short position of Smead Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Comstock and Smead Value.
Diversification Opportunities for Invesco Comstock and Smead Value
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Invesco and Smead is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Stock Fund and Smead Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Value Fund and Invesco Comstock 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 Stock Fund are associated (or correlated) with Smead Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Value Fund has no effect on the direction of Invesco Comstock i.e., Invesco Comstock and Smead Value go up and down completely randomly.
Pair Corralation between Invesco Comstock and Smead Value
Assuming the 90 days horizon Invesco Comstock is expected to generate 1.09 times less return on investment than Smead Value. But when comparing it to its historical volatility, Invesco Stock Fund is 1.41 times less risky than Smead Value. It trades about 0.19 of its potential returns per unit of risk. Smead Value Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,382 in Smead Value Fund on January 24, 2024 and sell it today you would earn a total of 589.00 from holding Smead Value Fund or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Stock Fund vs. Smead Value Fund
Performance |
| Timeline |
| Invesco Comstock |
| Smead Value Fund |
Invesco Comstock and Smead Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Comstock and Smead Value
The main advantage of trading using opposite Invesco Comstock and Smead Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Comstock position performs unexpectedly, Smead Value 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 Smead Value will offset losses from the drop in Smead Value's long position.| Invesco Comstock vs. Invesco Municipal Income | Invesco Comstock vs. Invesco Municipal Income | Invesco Comstock vs. Invesco Municipal Income | Invesco Comstock vs. Oppenheimer Rising Dividends |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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