Correlation Between SPDR Barclays and Invesco Short
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Invesco Short 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 Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and Invesco Short Duration, you can compare the effects of market volatilities on SPDR Barclays and Invesco Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Invesco Short.
Diversification Opportunities for SPDR Barclays and Invesco Short
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Invesco is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Invesco Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Short Duration 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 Short are associated (or correlated) with Invesco Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Short Duration has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Invesco Short go up and down completely randomly.
Pair Corralation between SPDR Barclays and Invesco Short
Given the investment horizon of 90 days SPDR Barclays is expected to generate 1.03 times less return on investment than Invesco Short. But when comparing it to its historical volatility, SPDR Barclays Short is 1.13 times less risky than Invesco Short. It trades about 0.11 of its potential returns per unit of risk. Invesco Short Duration is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,485 in Invesco Short Duration on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Invesco Short Duration or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Short vs. Invesco Short Duration
Performance |
| Timeline |
| SPDR Barclays Short |
| Invesco Short Duration |
SPDR Barclays and Invesco Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Invesco Short
The main advantage of trading using opposite SPDR Barclays and Invesco Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Invesco Short 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 Short will offset losses from the drop in Invesco Short's long position.| SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. Western Asset Short | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. iShares 1 5 Year |
| Invesco Short vs. iShares 5 10 Year | Invesco Short vs. iShares 0 5 Year | Invesco Short vs. SPDR Barclays Short | Invesco Short vs. iShares Core Total |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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