Correlation Between SPDR Morgan and Invesco
Can any of the company-specific risk be diversified away by investing in both SPDR Morgan and Invesco 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 Morgan and Invesco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Morgan Stanley and Invesco, you can compare the effects of market volatilities on SPDR Morgan and Invesco 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 Morgan with a short position of Invesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Morgan and Invesco.
Diversification Opportunities for SPDR Morgan and Invesco
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Invesco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Morgan Stanley and Invesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco and SPDR Morgan 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 Morgan Stanley are associated (or correlated) with Invesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco has no effect on the direction of SPDR Morgan i.e., SPDR Morgan and Invesco go up and down completely randomly.
Pair Corralation between SPDR Morgan and Invesco
Given the investment horizon of 90 days SPDR Morgan Stanley is expected to generate 1.09 times more return on investment than Invesco. However, SPDR Morgan is 1.09 times more volatile than Invesco. It trades about 0.09 of its potential returns per unit of risk. Invesco is currently generating about 0.09 per unit of risk. If you would invest 13,944 in SPDR Morgan Stanley on October 24, 2024 and sell it today you would earn a total of 7,340 from holding SPDR Morgan Stanley or generate 52.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.1% |
| Values | Daily Returns |
SPDR Morgan Stanley vs. Invesco
Performance |
| Timeline |
| SPDR Morgan Stanley |
| Invesco |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR Morgan and Invesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Morgan and Invesco
The main advantage of trading using opposite SPDR Morgan and Invesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Morgan position performs unexpectedly, Invesco 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 will offset losses from the drop in Invesco's long position.| SPDR Morgan vs. SPDR FactSet Innovative | SPDR Morgan vs. SPDR SP Software | SPDR Morgan vs. SPDR SP Health | SPDR Morgan vs. iShares Expanded Tech |
| Invesco vs. Invesco Dynamic Semiconductors | Invesco vs. Invesco DWA Utilities | Invesco vs. Invesco Dynamic Large |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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