Correlation Between Invesco SP and Swan Hedged
Can any of the company-specific risk be diversified away by investing in both Invesco SP and Swan Hedged 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 Swan Hedged 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 Swan Hedged Equity, you can compare the effects of market volatilities on Invesco SP and Swan Hedged 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 Swan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Swan Hedged.
Diversification Opportunities for Invesco SP and Swan Hedged
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Swan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and Swan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Hedged Equity 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 Swan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Hedged Equity has no effect on the direction of Invesco SP i.e., Invesco SP and Swan Hedged go up and down completely randomly.
Pair Corralation between Invesco SP and Swan Hedged
Given the investment horizon of 90 days Invesco SP is expected to generate 7.57 times less return on investment than Swan Hedged. In addition to that, Invesco SP is 1.31 times more volatile than Swan Hedged Equity. It trades about 0.01 of its total potential returns per unit of risk. Swan Hedged Equity is currently generating about 0.13 per unit of volatility. If you would invest 2,206 in Swan Hedged Equity on November 1, 2024 and sell it today you would earn a total of 90.00 from holding Swan Hedged Equity or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. Swan Hedged Equity
Performance |
| Timeline |
| Invesco SP 500 |
| Swan Hedged Equity |
Invesco SP and Swan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Swan Hedged
The main advantage of trading using opposite Invesco SP and Swan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, Swan Hedged 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 Swan Hedged will offset losses from the drop in Swan Hedged'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 |
| Swan Hedged vs. Amplify BlackSwan Growth | Swan Hedged vs. Invesco SP 500 | Swan Hedged vs. Simplify Exchange Traded | Swan Hedged vs. Simplify Equity PLUS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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