Correlation Between SPDR Barclays and Invesco Variable
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Invesco Variable 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 SPDR Barclays and Invesco Variable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Long and Invesco Variable Rate, you can compare the effects of market volatilities on SPDR Barclays and Invesco Variable 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 SPDR Barclays with a short position of Invesco Variable. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Invesco Variable.
Diversification Opportunities for SPDR Barclays and Invesco Variable
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and Invesco is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long and Invesco Variable Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Variable Rate and SPDR Barclays 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 SPDR Barclays Long are associated (or correlated) with Invesco Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Variable Rate has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Invesco Variable go up and down completely randomly.
Pair Corralation between SPDR Barclays and Invesco Variable
Given the investment horizon of 90 days SPDR Barclays Long is expected to generate 22.8 times more return on investment than Invesco Variable. However, SPDR Barclays is 22.8 times more volatile than Invesco Variable Rate. It trades about 0.08 of its potential returns per unit of risk. Invesco Variable Rate is currently generating about 0.52 per unit of risk. If you would invest 2,296 in SPDR Barclays Long on August 31, 2024 and sell it today you would earn a total of 33.00 from holding SPDR Barclays Long or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Long vs. Invesco Variable Rate
Performance |
| Timeline |
| SPDR Barclays Long |
| Invesco Variable Rate |
SPDR Barclays and Invesco Variable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Invesco Variable
The main advantage of trading using opposite SPDR Barclays and Invesco Variable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Invesco Variable 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 Invesco Variable will offset losses from the drop in Invesco Variable's long position.| SPDR Barclays vs. iShares 10 Year | SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. FlexShares Credit Scored Long |
| Invesco Variable vs. iShares ESG 1 5 | Invesco Variable vs. First Trust Low | Invesco Variable vs. First Trust Managed | Invesco Variable vs. First Trust Enhanced |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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