Correlation Between SPDR SP and Invesco High
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Invesco High 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 SPDR SP and Invesco High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP International and Invesco High Yield, you can compare the effects of market volatilities on SPDR SP and Invesco High 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 SPDR SP with a short position of Invesco High. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Invesco High.
Diversification Opportunities for SPDR SP and Invesco High
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Invesco is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP International and Invesco High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco High Yield and SPDR 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 SPDR SP International are associated (or correlated) with Invesco High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco High Yield has no effect on the direction of SPDR SP i.e., SPDR SP and Invesco High go up and down completely randomly.
Pair Corralation between SPDR SP and Invesco High
Considering the 90-day investment horizon SPDR SP International is expected to under-perform the Invesco High. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SP International is 1.59 times less risky than Invesco High. The etf trades about -0.16 of its potential returns per unit of risk. The Invesco High Yield is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,174 in Invesco High Yield on August 23, 2024 and sell it today you would earn a total of 64.00 from holding Invesco High Yield or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP International vs. Invesco High Yield
Performance |
| Timeline |
| SPDR SP International |
| Invesco High Yield |
SPDR SP and Invesco High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Invesco High
The main advantage of trading using opposite SPDR SP and Invesco High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Invesco High 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 Invesco High will offset losses from the drop in Invesco High's long position.| SPDR SP vs. SPDR SP Emerging | SPDR SP vs. iShares International Select | SPDR SP vs. First Trust Dow | SPDR SP vs. Invesco International Dividend |
| Invesco High vs. First Trust Small | Invesco High vs. First Trust Mid | Invesco High vs. First Trust Small | Invesco High vs. First Trust Large |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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