Correlation Between State Street and Invesco Technology
Can any of the company-specific risk be diversified away by investing in both State Street and Invesco Technology 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 State Street and Invesco Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Real and Invesco Technology Fund, you can compare the effects of market volatilities on State Street and Invesco Technology 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 State Street with a short position of Invesco Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Invesco Technology.
Diversification Opportunities for State Street and Invesco Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Invesco is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding State Street Real and Invesco Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology and State Street 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 State Street Real are associated (or correlated) with Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of State Street i.e., State Street and Invesco Technology go up and down completely randomly.
Pair Corralation between State Street and Invesco Technology
Assuming the 90 days horizon State Street is expected to generate 2.05 times less return on investment than Invesco Technology. But when comparing it to its historical volatility, State Street Real is 1.67 times less risky than Invesco Technology. It trades about 0.07 of its potential returns per unit of risk. Invesco Technology Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,527 in Invesco Technology Fund on November 3, 2024 and sell it today you would earn a total of 208.00 from holding Invesco Technology Fund or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
State Street Real vs. Invesco Technology Fund
Performance |
| Timeline |
| State Street Real |
| Invesco Technology |
State Street and Invesco Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Invesco Technology
The main advantage of trading using opposite State Street and Invesco Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Invesco Technology 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 Technology will offset losses from the drop in Invesco Technology's long position.| State Street vs. Pace Municipal Fixed | State Street vs. Old Westbury California | State Street vs. Morningstar Municipal Bond | State Street vs. Lind Capital Partners |
| Invesco Technology vs. Stone Ridge Diversified | Invesco Technology vs. Tax Managed Mid Small | Invesco Technology vs. Lord Abbett Diversified | Invesco Technology vs. Fulcrum Diversified Absolute |
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
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| 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 | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |