Correlation Between SPDR SP and Invesco
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Invesco 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 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP MIDCAP and Invesco, you can compare the effects of market volatilities on SPDR SP and Invesco 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Invesco.
Diversification Opportunities for SPDR SP and Invesco
Very poor diversification
The 3 months correlation between SPDR and Invesco is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP MIDCAP and Invesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco 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 MIDCAP are associated (or correlated) with Invesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco has no effect on the direction of SPDR SP i.e., SPDR SP and Invesco go up and down completely randomly.
Pair Corralation between SPDR SP and Invesco
If you would invest 57,342 in SPDR SP MIDCAP on August 29, 2024 and sell it today you would earn a total of 4,348 from holding SPDR SP MIDCAP or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.35% |
| Values | Daily Returns |
SPDR SP MIDCAP vs. Invesco
Performance |
| Timeline |
| SPDR SP MIDCAP |
| Invesco |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and Invesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Invesco
The main advantage of trading using opposite SPDR SP and Invesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Invesco 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 will offset losses from the drop in Invesco's long position.| SPDR SP vs. iShares Core SP | SPDR SP vs. iShares Russell 2000 | SPDR SP vs. iShares MSCI EAFE | SPDR SP vs. iShares Russell 2000 |
| Invesco vs. Invesco SP 100 | Invesco vs. Invesco Russell 1000 | Invesco vs. Invesco Zacks Mid Cap | Invesco vs. Invesco SP MidCap |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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