Correlation Between SPDR Barclays and Invesco Markets
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Invesco Markets 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 Barclays and Invesco Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Capital and Invesco Markets III, you can compare the effects of market volatilities on SPDR Barclays and Invesco Markets 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 Barclays with a short position of Invesco Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Invesco Markets.
Diversification Opportunities for SPDR Barclays and Invesco Markets
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Invesco is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Capital and Invesco Markets III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Markets III and SPDR Barclays 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 Barclays Capital are associated (or correlated) with Invesco Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Markets III has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Invesco Markets go up and down completely randomly.
Pair Corralation between SPDR Barclays and Invesco Markets
Assuming the 90 days trading horizon SPDR Barclays Capital is expected to generate 0.39 times more return on investment than Invesco Markets. However, SPDR Barclays Capital is 2.56 times less risky than Invesco Markets. It trades about 0.18 of its potential returns per unit of risk. Invesco Markets III is currently generating about 0.06 per unit of risk. If you would invest 5,177 in SPDR Barclays Capital on November 2, 2024 and sell it today you would earn a total of 76.00 from holding SPDR Barclays Capital or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Capital vs. Invesco Markets III
Performance |
| Timeline |
| SPDR Barclays Capital |
| Invesco Markets III |
SPDR Barclays and Invesco Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Invesco Markets
The main advantage of trading using opposite SPDR Barclays and Invesco Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Invesco Markets 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 Markets will offset losses from the drop in Invesco Markets' long position.| SPDR Barclays vs. SPDR MSCI Europe | SPDR Barclays vs. SPDR MSCI Europe | SPDR Barclays vs. SPDR Barclays Cap | SPDR Barclays vs. SPDR SP 500 |
| Invesco Markets vs. Lyxor UCITS NASDAQ 100 | Invesco Markets vs. Lyxor UCITS Stoxx | Invesco Markets vs. Lyxor UCITS MSCI | Invesco Markets vs. Multi Units Luxembourg |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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