Correlation Between Invesco SP and Driven Brands
Can any of the company-specific risk be diversified away by investing in both Invesco SP and Driven Brands 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 Driven Brands 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 Driven Brands Holdings, you can compare the effects of market volatilities on Invesco SP and Driven Brands 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 Driven Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Driven Brands.
Diversification Opportunities for Invesco SP and Driven Brands
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and Driven is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and Driven Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driven Brands Holdings 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 Driven Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driven Brands Holdings has no effect on the direction of Invesco SP i.e., Invesco SP and Driven Brands go up and down completely randomly.
Pair Corralation between Invesco SP and Driven Brands
Considering the 90-day investment horizon Invesco SP 500 is expected to under-perform the Driven Brands. But the etf apears to be less risky and, when comparing its historical volatility, Invesco SP 500 is 2.46 times less risky than Driven Brands. The etf trades about -0.13 of its potential returns per unit of risk. The Driven Brands Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,672 in Driven Brands Holdings on September 13, 2024 and sell it today you would earn a total of 43.00 from holding Driven Brands Holdings or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. Driven Brands Holdings
Performance |
| Timeline |
| Invesco SP 500 |
| Driven Brands Holdings |
Invesco SP and Driven Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Driven Brands
The main advantage of trading using opposite Invesco SP and Driven Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, Driven Brands 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 Driven Brands will offset losses from the drop in Driven Brands' long position.| Invesco SP vs. Invesco DWA Utilities | Invesco SP vs. Invesco Dynamic Food | Invesco SP vs. SCOR PK | Invesco SP vs. Morningstar Unconstrained Allocation |
| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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