Correlation Between Invesco SP and Listed Funds
Can any of the company-specific risk be diversified away by investing in both Invesco SP and Listed Funds 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 Listed Funds 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 Listed Funds Trust, you can compare the effects of market volatilities on Invesco SP and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Listed Funds.
Diversification Opportunities for Invesco SP and Listed Funds
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and Listed is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Invesco SP i.e., Invesco SP and Listed Funds go up and down completely randomly.
Pair Corralation between Invesco SP and Listed Funds
Considering the 90-day investment horizon Invesco SP 500 is expected to generate 2.3 times more return on investment than Listed Funds. However, Invesco SP is 2.3 times more volatile than Listed Funds Trust. It trades about 0.09 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.04 per unit of risk. If you would invest 4,125 in Invesco SP 500 on September 12, 2024 and sell it today you would earn a total of 1,243 from holding Invesco SP 500 or generate 30.13% 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. Listed Funds Trust
Performance |
| Timeline |
| Invesco SP 500 |
| Listed Funds Trust |
Invesco SP and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Listed Funds
The main advantage of trading using opposite Invesco SP and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' 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 |
| Listed Funds vs. Invesco SP 500 | Listed Funds vs. Invesco SP 500 | Listed Funds vs. Invesco SP 500 | Listed Funds vs. Aquagold 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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