Correlation Between Invesco SP and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Invesco SP and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio SP, you can compare the effects of market volatilities on Invesco SP and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and SPDR Portfolio.
Diversification Opportunities for Invesco SP and SPDR Portfolio
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and SPDR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of Invesco SP i.e., Invesco SP and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Invesco SP and SPDR Portfolio
Given the investment horizon of 90 days Invesco SP is expected to generate 1.07 times less return on investment than SPDR Portfolio. But when comparing it to its historical volatility, Invesco SP 500 is 1.17 times less risky than SPDR Portfolio. It trades about 0.06 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,727 in SPDR Portfolio SP on August 26, 2024 and sell it today you would earn a total of 946.00 from holding SPDR Portfolio SP or generate 25.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco SP 500 vs. SPDR Portfolio SP
Performance |
| Timeline |
| Invesco SP 500 |
| SPDR Portfolio SP |
Invesco SP and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and SPDR Portfolio
The main advantage of trading using opposite Invesco SP and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Invesco SP vs. SPDR Portfolio SP | Invesco SP vs. Schwab Dividend Equity | Invesco SP vs. Vanguard High Dividend | Invesco SP vs. iShares Core Dividend |
| SPDR Portfolio vs. Invesco SP 500 | SPDR Portfolio vs. iShares Core High | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. Schwab Dividend Equity |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stocks Directory Find actively traded stocks across global markets |