Correlation Between Invesco Stock and Federated Global

Can any of the company-specific risk be diversified away by investing in both Invesco Stock and Federated Global 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 Stock and Federated Global 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 Federated Global Allocation, you can compare the effects of market volatilities on Invesco Stock and Federated Global 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 Stock with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Stock and Federated Global.

Diversification Opportunities for Invesco Stock and Federated Global

0.95

Correlation Coefficient

Invesco Stock  Federated Global

Almost no diversification

The 3 months correlation between Invesco and Federated is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Stock Fund and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Invesco Stock 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 Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Invesco Stock i.e., Invesco Stock and Federated Global go up and down completely randomly.

Pair Corralation between Invesco Stock and Federated Global

Assuming the 90 days horizon Invesco Stock is expected to generate 1.03 times less return on investment than Federated Global. In addition to that, Invesco Stock is 1.57 times more volatile than Federated Global Allocation. It trades about 0.13 of its total potential returns per unit of risk. Federated Global Allocation is currently generating about 0.2 per unit of volatility. If you would invest  2,062  in Federated Global Allocation on May 18, 2025 and sell it today you would earn a total of  114.00  from holding Federated Global Allocation or generate 5.53% 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.  Federated Global Allocation

Invesco Stock

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Stock Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Invesco Stock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Federated Global All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Global Allocation are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Federated Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Invesco Stock and Federated Global

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

The idea behind Invesco Stock Fund and Federated Global Allocation 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.