Correlation Between Invesco Value and Sprott Physical

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

By analyzing existing cross correlation between Invesco Value Municipal and Sprott Physical Platinum, you can compare the effects of market volatilities on Invesco Value and Sprott Physical 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 Value with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Value and Sprott Physical.

Diversification Opportunities for Invesco Value and Sprott Physical

-0.71

Correlation Coefficient

Invesco Value  Sprott Physical

Pay attention - limited upside

The 3 months correlation between Invesco and Sprott is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Value Municipal and Sprott Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Platinum and Invesco Value 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 Value Municipal are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Platinum has no effect on the direction of Invesco Value i.e., Invesco Value and Sprott Physical go up and down completely randomly.

Pair Corralation between Invesco Value and Sprott Physical

Considering the 90-day investment horizon Invesco Value Municipal is expected to under-perform the Sprott Physical. But the stock apears to be less risky and, when comparing its historical volatility, Invesco Value Municipal is 4.78 times less risky than Sprott Physical. The stock trades about -0.06 of its potential returns per unit of risk. The Sprott Physical Platinum is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  944.00  in Sprott Physical Platinum on May 4, 2025 and sell it today you would earn a total of  262.00  from holding Sprott Physical Platinum or generate 27.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Invesco Value Municipal  vs.  Sprott Physical Platinum

Invesco Value Municipal

Risk-Adjusted Performance

Very Weak

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

Sprott Physical Platinum

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Platinum are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Sprott Physical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Value and Sprott Physical

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

The idea behind Invesco Value Municipal and Sprott Physical Platinum 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.