Correlation Between Invesco Optimum and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both Invesco Optimum and Barclays 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 Optimum and Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Optimum Yield and Barclays Capital, you can compare the effects of market volatilities on Invesco Optimum and Barclays 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 Optimum with a short position of Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Optimum and Barclays Capital.
Diversification Opportunities for Invesco Optimum and Barclays Capital
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Barclays is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Optimum Yield and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and Invesco Optimum 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 Optimum Yield are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Invesco Optimum i.e., Invesco Optimum and Barclays Capital go up and down completely randomly.
Pair Corralation between Invesco Optimum and Barclays Capital
Given the investment horizon of 90 days Invesco Optimum Yield is expected to generate 1.44 times more return on investment than Barclays Capital. However, Invesco Optimum is 1.44 times more volatile than Barclays Capital. It trades about 0.03 of its potential returns per unit of risk. Barclays Capital is currently generating about -0.08 per unit of risk. If you would invest 1,348 in Invesco Optimum Yield on January 26, 2024 and sell it today you would earn a total of 73.00 from holding Invesco Optimum Yield or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.39% |
| Values | Daily Returns |
Invesco Optimum Yield vs. Barclays Capital
Performance |
| Timeline |
| Invesco Optimum Yield |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Invesco Optimum and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Optimum and Barclays Capital
The main advantage of trading using opposite Invesco Optimum and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Optimum position performs unexpectedly, Barclays 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.The idea behind Invesco Optimum Yield and Barclays Capital 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |