Correlation Between Invesco High and IShares Russell

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

By analyzing existing cross correlation between Invesco High Yield and iShares Russell Mid Cap, you can compare the effects of market volatilities on Invesco High and IShares Russell 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 High with a short position of IShares Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and IShares Russell.

Diversification Opportunities for Invesco High and IShares Russell

0.95

Correlation Coefficient

Invesco High  IShares Russell

Almost no diversification

The 3 months correlation between Invesco and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Yield and iShares Russell Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Russell Mid and Invesco High 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 High Yield are associated (or correlated) with IShares Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Russell Mid has no effect on the direction of Invesco High i.e., Invesco High and IShares Russell go up and down completely randomly.

Pair Corralation between Invesco High and IShares Russell

Considering the 90-day investment horizon Invesco High Yield is expected to under-perform the IShares Russell. In addition to that, Invesco High is 1.21 times more volatile than iShares Russell Mid Cap. It trades about -0.06 of its total potential returns per unit of risk. iShares Russell Mid Cap is currently generating about 0.03 per unit of volatility. If you would invest  13,384  in iShares Russell Mid Cap on May 7, 2025 and sell it today you would earn a total of  67.00  from holding iShares Russell Mid Cap or generate 0.5% return on investment over 90 days.

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

Invesco High Yield  vs.  iShares Russell Mid Cap

Invesco High Yield

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco High Yield are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Invesco High is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

iShares Russell Mid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Russell Mid Cap are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, IShares Russell may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Invesco High and IShares Russell

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

The idea behind Invesco High Yield and iShares Russell Mid Cap 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 Commodity Directory module to find actively traded commodities issued by global exchanges.