Correlation Between Invesco SP and EA Series
Can any of the company-specific risk be diversified away by investing in both Invesco SP and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on Invesco SP and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and EA Series.
Diversification Opportunities for Invesco SP and EA Series
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and DRLL is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Invesco SP i.e., Invesco SP and EA Series go up and down completely randomly.
Pair Corralation between Invesco SP and EA Series
Given the investment horizon of 90 days Invesco SP is expected to generate 5.71 times less return on investment than EA Series. But when comparing it to its historical volatility, Invesco SP 500 is 1.47 times less risky than EA Series. It trades about 0.08 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,833 in EA Series Trust on September 2, 2024 and sell it today you would earn a total of 200.00 from holding EA Series Trust or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. EA Series Trust
Performance |
| Timeline |
| Invesco SP 500 |
| EA Series Trust |
Invesco SP and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and EA Series
The main advantage of trading using opposite Invesco SP and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Invesco SP vs. First Trust Exchange Traded | Invesco SP vs. Ultimus Managers Trust | Invesco SP vs. Horizon Kinetics Medical | Invesco SP vs. Harbor Health Care |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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