Correlation Between Invesco Solar and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both Invesco Solar and SPDR Kensho 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 Solar and SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Solar ETF and SPDR Kensho New, you can compare the effects of market volatilities on Invesco Solar and SPDR Kensho 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 Solar with a short position of SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Solar and SPDR Kensho.
Diversification Opportunities for Invesco Solar and SPDR Kensho
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and SPDR is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Solar ETF and SPDR Kensho New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho New and Invesco Solar 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 Solar ETF are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho New has no effect on the direction of Invesco Solar i.e., Invesco Solar and SPDR Kensho go up and down completely randomly.
Pair Corralation between Invesco Solar and SPDR Kensho
Considering the 90-day investment horizon Invesco Solar ETF is expected to under-perform the SPDR Kensho. In addition to that, Invesco Solar is 1.99 times more volatile than SPDR Kensho New. It trades about -0.04 of its total potential returns per unit of risk. SPDR Kensho New is currently generating about 0.07 per unit of volatility. If you would invest 4,604 in SPDR Kensho New on August 27, 2024 and sell it today you would earn a total of 745.00 from holding SPDR Kensho New or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Solar ETF vs. SPDR Kensho New
Performance |
| Timeline |
| Invesco Solar ETF |
| SPDR Kensho New |
Invesco Solar and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Solar and SPDR Kensho
The main advantage of trading using opposite Invesco Solar and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Solar position performs unexpectedly, SPDR Kensho 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 Kensho will offset losses from the drop in SPDR Kensho's long position.| Invesco Solar vs. SPDR Kensho New | Invesco Solar vs. Global X FinTech | Invesco Solar vs. iShares Genomics Immunology | Invesco Solar vs. Aquagold International |
| SPDR Kensho vs. SPDR Kensho Clean | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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