Correlation Between SPDR Russell and Invesco Exchange
Can any of the company-specific risk be diversified away by investing in both SPDR Russell and Invesco Exchange 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 Russell and Invesco Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Russell 1000 and Invesco Exchange Traded, you can compare the effects of market volatilities on SPDR Russell and Invesco Exchange 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 Russell with a short position of Invesco Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Invesco Exchange.
Diversification Opportunities for SPDR Russell and Invesco Exchange
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Invesco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Invesco Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Exchange Traded and SPDR Russell 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 Russell 1000 are associated (or correlated) with Invesco Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Exchange Traded has no effect on the direction of SPDR Russell i.e., SPDR Russell and Invesco Exchange go up and down completely randomly.
Pair Corralation between SPDR Russell and Invesco Exchange
Given the investment horizon of 90 days SPDR Russell is expected to generate 1.3 times less return on investment than Invesco Exchange. In addition to that, SPDR Russell is 1.08 times more volatile than Invesco Exchange Traded. It trades about 0.1 of its total potential returns per unit of risk. Invesco Exchange Traded is currently generating about 0.14 per unit of volatility. If you would invest 2,611 in Invesco Exchange Traded on August 25, 2024 and sell it today you would earn a total of 652.00 from holding Invesco Exchange Traded or generate 24.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Russell 1000 vs. Invesco Exchange Traded
Performance |
| Timeline |
| SPDR Russell 1000 |
| Invesco Exchange Traded |
SPDR Russell and Invesco Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and Invesco Exchange
The main advantage of trading using opposite SPDR Russell and Invesco Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell position performs unexpectedly, Invesco Exchange 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 Exchange will offset losses from the drop in Invesco Exchange's long position.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR SP 400 | SPDR Russell vs. SPDR MSCI EAFE |
| Invesco Exchange vs. iShares Russell Mid Cap | Invesco Exchange vs. SPDR SP 400 | Invesco Exchange vs. Invesco High Yield | Invesco Exchange vs. SPDR Russell 1000 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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