Correlation Between Invesco SP and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both Invesco SP and Barclays ETN 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 SP and Barclays ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP Spin Off and Barclays ETN Select, you can compare the effects of market volatilities on Invesco SP and Barclays ETN 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 SP with a short position of Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Barclays ETN.
Diversification Opportunities for Invesco SP and Barclays ETN
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Barclays is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP Spin Off and Barclays ETN Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN Select and Invesco SP 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 SP Spin Off are associated (or correlated) with Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN Select has no effect on the direction of Invesco SP i.e., Invesco SP and Barclays ETN go up and down completely randomly.
Pair Corralation between Invesco SP and Barclays ETN
Considering the 90-day investment horizon Invesco SP is expected to generate 1.2 times less return on investment than Barclays ETN. In addition to that, Invesco SP is 1.54 times more volatile than Barclays ETN Select. It trades about 0.3 of its total potential returns per unit of risk. Barclays ETN Select is currently generating about 0.55 per unit of volatility. If you would invest 2,668 in Barclays ETN Select on August 26, 2024 and sell it today you would earn a total of 330.00 from holding Barclays ETN Select or generate 12.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP Spin Off vs. Barclays ETN Select
Performance |
| Timeline |
| Invesco SP Spin |
| Barclays ETN Select |
Invesco SP and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Barclays ETN
The main advantage of trading using opposite Invesco SP and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, Barclays ETN 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 Barclays ETN will offset losses from the drop in Barclays ETN's long position.| Invesco SP vs. Invesco BuyBack Achievers | Invesco SP vs. First Trust Equity | Invesco SP vs. Invesco Zacks Mid Cap |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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