Correlation Between Invesco SP and Aptus Collared
Can any of the company-specific risk be diversified away by investing in both Invesco SP and Aptus Collared 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 SP and Aptus Collared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP 500 and Aptus Collared Income, you can compare the effects of market volatilities on Invesco SP and Aptus Collared 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 SP with a short position of Aptus Collared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Aptus Collared.
Diversification Opportunities for Invesco SP and Aptus Collared
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Aptus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and Aptus Collared Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Collared Income and Invesco 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 Invesco SP 500 are associated (or correlated) with Aptus Collared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Collared Income has no effect on the direction of Invesco SP i.e., Invesco SP and Aptus Collared go up and down completely randomly.
Pair Corralation between Invesco SP and Aptus Collared
Given the investment horizon of 90 days Invesco SP 500 is expected to under-perform the Aptus Collared. In addition to that, Invesco SP is 1.1 times more volatile than Aptus Collared Income. It trades about -0.08 of its total potential returns per unit of risk. Aptus Collared Income is currently generating about 0.06 per unit of volatility. If you would invest 4,033 in Aptus Collared Income on August 23, 2024 and sell it today you would earn a total of 37.00 from holding Aptus Collared Income or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. Aptus Collared Income
Performance |
| Timeline |
| Invesco SP 500 |
| Aptus Collared Income |
Invesco SP and Aptus Collared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Aptus Collared
The main advantage of trading using opposite Invesco SP and Aptus Collared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, Aptus Collared 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 Aptus Collared will offset losses from the drop in Aptus Collared's long position.| Invesco SP vs. Invesco DWA Emerging | Invesco SP vs. First Trust LongShort | Invesco SP vs. Amplify BlackSwan Growth | Invesco SP vs. Invesco SP 500 |
| Aptus Collared vs. Core Alternative ETF | Aptus Collared vs. Aptus Drawdown Managed | Aptus Collared vs. Amplify BlackSwan Growth | Aptus Collared vs. Invesco SP 500 |
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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