Correlation Between Invesco Floating and Omni Small-cap
Can any of the company-specific risk be diversified away by investing in both Invesco Floating and Omni Small-cap 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 Floating and Omni Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Floating Rate and Omni Small Cap Value, you can compare the effects of market volatilities on Invesco Floating and Omni Small-cap 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 Floating with a short position of Omni Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Floating and Omni Small-cap.
Diversification Opportunities for Invesco Floating and Omni Small-cap
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Omni is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Floating Rate and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap and Invesco Floating 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 Floating Rate are associated (or correlated) with Omni Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Invesco Floating i.e., Invesco Floating and Omni Small-cap go up and down completely randomly.
Pair Corralation between Invesco Floating and Omni Small-cap
Assuming the 90 days horizon Invesco Floating is expected to generate 17.52 times less return on investment than Omni Small-cap. But when comparing it to its historical volatility, Invesco Floating Rate is 11.75 times less risky than Omni Small-cap. It trades about 0.13 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,636 in Omni Small Cap Value on June 2, 2025 and sell it today you would earn a total of 276.00 from holding Omni Small Cap Value or generate 16.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Floating Rate vs. Omni Small Cap Value
Performance |
| Timeline |
| Invesco Floating Rate |
| Omni Small Cap |
Invesco Floating and Omni Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Floating and Omni Small-cap
The main advantage of trading using opposite Invesco Floating and Omni Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Floating position performs unexpectedly, Omni Small-cap 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 Omni Small-cap will offset losses from the drop in Omni Small-cap's long position.| Invesco Floating vs. Invesco Municipal Income | Invesco Floating vs. Invesco Municipal Income | Invesco Floating vs. Invesco Municipal Income | Invesco Floating vs. Oppenheimer Rising Dividends |
| Omni Small-cap vs. Vanguard Money Market | Omni Small-cap vs. Profunds Money | Omni Small-cap vs. Edward Jones Money | Omni Small-cap vs. Prudential Government Money |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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