Correlation Between Invesco Exchange and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Invesco Exchange and SPDR SP 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 Exchange and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Exchange Traded and SPDR SP 500, you can compare the effects of market volatilities on Invesco Exchange and SPDR SP 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 Exchange with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Exchange and SPDR SP.
Diversification Opportunities for Invesco Exchange and SPDR SP
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Exchange Traded and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and Invesco Exchange 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 Exchange Traded are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of Invesco Exchange i.e., Invesco Exchange and SPDR SP go up and down completely randomly.
Pair Corralation between Invesco Exchange and SPDR SP
Given the investment horizon of 90 days Invesco Exchange Traded is expected to generate 0.89 times more return on investment than SPDR SP. However, Invesco Exchange Traded is 1.13 times less risky than SPDR SP. It trades about 0.19 of its potential returns per unit of risk. SPDR SP 500 is currently generating about 0.15 per unit of risk. If you would invest 3,161 in Invesco Exchange Traded on August 25, 2024 and sell it today you would earn a total of 102.00 from holding Invesco Exchange Traded or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Exchange Traded vs. SPDR SP 500
Performance |
| Timeline |
| Invesco Exchange Traded |
| SPDR SP 500 |
Invesco Exchange and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Exchange and SPDR SP
The main advantage of trading using opposite Invesco Exchange and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Exchange position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Invesco Exchange vs. iShares Russell Mid Cap | Invesco Exchange vs. SPDR SP 400 | Invesco Exchange vs. Invesco High Yield | Invesco Exchange vs. SPDR Russell 1000 |
| SPDR SP vs. FT Vest Equity | SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. First Trust Exchange Traded |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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