Correlation Between SPDR Barclays and Invesco Technology
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Invesco Technology 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 Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays 10 and Invesco Technology SP, you can compare the effects of market volatilities on SPDR Barclays and Invesco Technology 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 Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Invesco Technology.
Diversification Opportunities for SPDR Barclays and Invesco Technology
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and Invesco is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays 10 and Invesco Technology SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology 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 10 are associated (or correlated) with Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Invesco Technology go up and down completely randomly.
Pair Corralation between SPDR Barclays and Invesco Technology
Assuming the 90 days trading horizon SPDR Barclays is expected to generate 48.68 times less return on investment than Invesco Technology. But when comparing it to its historical volatility, SPDR Barclays 10 is 1.64 times less risky than Invesco Technology. It trades about 0.0 of its potential returns per unit of risk. Invesco Technology SP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 54,831 in Invesco Technology SP on August 27, 2024 and sell it today you would earn a total of 12,875 from holding Invesco Technology SP or generate 23.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays 10 vs. Invesco Technology SP
Performance |
| Timeline |
| SPDR Barclays 10 |
| Invesco Technology |
SPDR Barclays and Invesco Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Invesco Technology
The main advantage of trading using opposite SPDR Barclays and Invesco Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Invesco Technology 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 Technology will offset losses from the drop in Invesco Technology's long position.| SPDR Barclays vs. Leverage Shares 3x | SPDR Barclays vs. WisdomTree SP 500 | SPDR Barclays vs. WisdomTree Silver 3x | SPDR Barclays vs. Leverage Shares 3x |
| Invesco Technology vs. Invesco MSCI Emerging | Invesco Technology vs. Invesco EURO STOXX | Invesco Technology vs. Invesco Markets Plc | Invesco Technology vs. Invesco FTSE RAFI |
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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