Correlation Between Invesco PureBeta and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Invesco PureBeta and SPDR DoubleLine 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 Invesco PureBeta and SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco PureBeta 0 5 and SPDR DoubleLine Emerging, you can compare the effects of market volatilities on Invesco PureBeta and SPDR DoubleLine 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 Invesco PureBeta with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco PureBeta and SPDR DoubleLine.
Diversification Opportunities for Invesco PureBeta and SPDR DoubleLine
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and SPDR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Invesco PureBeta 0 5 and SPDR DoubleLine Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Emerging and Invesco PureBeta 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 Invesco PureBeta 0 5 are associated (or correlated) with SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Emerging has no effect on the direction of Invesco PureBeta i.e., Invesco PureBeta and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Invesco PureBeta and SPDR DoubleLine
Given the investment horizon of 90 days Invesco PureBeta 0 5 is expected to generate 0.68 times more return on investment than SPDR DoubleLine. However, Invesco PureBeta 0 5 is 1.48 times less risky than SPDR DoubleLine. It trades about 0.08 of its potential returns per unit of risk. SPDR DoubleLine Emerging is currently generating about -0.05 per unit of risk. If you would invest 2,542 in Invesco PureBeta 0 5 on August 26, 2024 and sell it today you would earn a total of 4.00 from holding Invesco PureBeta 0 5 or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco PureBeta 0 5 vs. SPDR DoubleLine Emerging
Performance |
| Timeline |
| Invesco PureBeta 0 |
| SPDR DoubleLine Emerging |
Invesco PureBeta and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco PureBeta and SPDR DoubleLine
The main advantage of trading using opposite Invesco PureBeta and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco PureBeta position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine's long position.| Invesco PureBeta vs. FlexShares iBoxx 3 Year | Invesco PureBeta vs. SPDR Bloomberg 1 10 | Invesco PureBeta vs. FlexShares iBoxx 5 Year | Invesco PureBeta vs. Goldman Sachs Access |
| SPDR DoubleLine vs. iShares JP Morgan | SPDR DoubleLine vs. Invesco Emerging Markets | SPDR DoubleLine vs. iShares JP Morgan | SPDR DoubleLine vs. iShares JP Morgan |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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