Correlation Between Invesco Emerging and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Invesco Emerging 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 Emerging 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 Emerging Markets and SPDR DoubleLine Emerging, you can compare the effects of market volatilities on Invesco Emerging 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 Emerging with a short position of SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Emerging and SPDR DoubleLine.
Diversification Opportunities for Invesco Emerging and SPDR DoubleLine
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and SPDR is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Emerging Markets 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 Emerging 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 Emerging Markets 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 Emerging i.e., Invesco Emerging and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Invesco Emerging and SPDR DoubleLine
Considering the 90-day investment horizon Invesco Emerging Markets is expected to generate 2.84 times more return on investment than SPDR DoubleLine. However, Invesco Emerging is 2.84 times more volatile than SPDR DoubleLine Emerging. It trades about 0.06 of its potential returns per unit of risk. SPDR DoubleLine Emerging is currently generating about 0.11 per unit of risk. If you would invest 1,694 in Invesco Emerging Markets on August 29, 2024 and sell it today you would earn a total of 375.00 from holding Invesco Emerging Markets or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Emerging Markets vs. SPDR DoubleLine Emerging
Performance |
| Timeline |
| Invesco Emerging Markets |
| SPDR DoubleLine Emerging |
Invesco Emerging and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Emerging and SPDR DoubleLine
The main advantage of trading using opposite Invesco Emerging and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Emerging 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 Emerging vs. iShares JP Morgan | Invesco Emerging vs. SPDR Bloomberg International | Invesco Emerging vs. VanEck JP Morgan | Invesco Emerging vs. Invesco Fundamental High |
| SPDR DoubleLine vs. SPDR DoubleLine Short | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR MSCI Emerging | SPDR DoubleLine vs. SPDR Bloomberg International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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