Correlation Between SPDR Bloomberg and Invesco Emerging
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and Invesco Emerging 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 Bloomberg and Invesco Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Barclays and Invesco Emerging Markets, you can compare the effects of market volatilities on SPDR Bloomberg and Invesco Emerging 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 Bloomberg with a short position of Invesco Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and Invesco Emerging.
Diversification Opportunities for SPDR Bloomberg and Invesco Emerging
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Invesco is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Barclays and Invesco Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Emerging Markets and SPDR Bloomberg 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 Bloomberg Barclays are associated (or correlated) with Invesco Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Emerging Markets has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and Invesco Emerging go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and Invesco Emerging
Given the investment horizon of 90 days SPDR Bloomberg Barclays is expected to generate 0.61 times more return on investment than Invesco Emerging. However, SPDR Bloomberg Barclays is 1.65 times less risky than Invesco Emerging. It trades about -0.05 of its potential returns per unit of risk. Invesco Emerging Markets is currently generating about -0.05 per unit of risk. If you would invest 2,449 in SPDR Bloomberg Barclays on August 26, 2024 and sell it today you would lose (25.00) from holding SPDR Bloomberg Barclays or give up 1.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg Barclays vs. Invesco Emerging Markets
Performance |
| Timeline |
| SPDR Bloomberg Barclays |
| Invesco Emerging Markets |
SPDR Bloomberg and Invesco Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and Invesco Emerging
The main advantage of trading using opposite SPDR Bloomberg and Invesco Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, Invesco Emerging 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 Emerging will offset losses from the drop in Invesco Emerging's long position.| SPDR Bloomberg vs. iShares JP Morgan | SPDR Bloomberg vs. Invesco Emerging Markets | SPDR Bloomberg vs. iShares JP Morgan | SPDR Bloomberg vs. iShares JP Morgan |
| Invesco Emerging vs. iShares JP Morgan | Invesco Emerging vs. SPDR Bloomberg International | Invesco Emerging vs. VanEck JP Morgan | Invesco Emerging vs. Invesco Fundamental High |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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