Correlation Between Invesco Advantage and General American

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

By analyzing existing cross correlation between Invesco Advantage MIT and General American Investors, you can compare the effects of market volatilities on Invesco Advantage and General American 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 Advantage with a short position of General American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Advantage and General American.

Diversification Opportunities for Invesco Advantage and General American

-0.1

Correlation Coefficient

Invesco Advantage  General American

Good diversification

The 3 months correlation between Invesco and General is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Advantage MIT and General American Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General American Inv and Invesco Advantage 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 Advantage MIT are associated (or correlated) with General American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General American Inv has no effect on the direction of Invesco Advantage i.e., Invesco Advantage and General American go up and down completely randomly.

Pair Corralation between Invesco Advantage and General American

Considering the 90-day investment horizon Invesco Advantage MIT is expected to under-perform the General American. But the stock apears to be less risky and, when comparing its historical volatility, Invesco Advantage MIT is 1.05 times less risky than General American. The stock trades about -0.01 of its potential returns per unit of risk. The General American Investors is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  5,165  in General American Investors on May 4, 2025 and sell it today you would earn a total of  474.00  from holding General American Investors or generate 9.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco Advantage MIT  vs.  General American Investors

Invesco Advantage MIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco Advantage MIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking signals, Invesco Advantage is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

General American Inv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in General American Investors are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, General American may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Invesco Advantage and General American

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

The idea behind Invesco Advantage MIT and General American Investors 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.