Correlation Between Bloom Select and Invesco SP

Can any of the company-specific risk be diversified away by investing in both Bloom Select and Invesco SP 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 Bloom Select and Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bloom Select Income and Invesco SP International, you can compare the effects of market volatilities on Bloom Select and Invesco SP 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 Bloom Select with a short position of Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloom Select and Invesco SP.

Diversification Opportunities for Bloom Select and Invesco SP

0.11

Correlation Coefficient

Bloom Select  Invesco SP

Average diversification

The 3 months correlation between Bloom and Invesco is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bloom Select Income and Invesco SP International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP International and Bloom Select 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 Bloom Select Income are associated (or correlated) with Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP International has no effect on the direction of Bloom Select i.e., Bloom Select and Invesco SP go up and down completely randomly.

Pair Corralation between Bloom Select and Invesco SP

Assuming the 90 days trading horizon Bloom Select Income is expected to generate 4.07 times more return on investment than Invesco SP. However, Bloom Select is 4.07 times more volatile than Invesco SP International. It trades about 0.02 of its potential returns per unit of risk. Invesco SP International is currently generating about -0.07 per unit of risk. If you would invest  791.00  in Bloom Select Income on September 3, 2024 and sell it today you would earn a total of  6.00  from holding Bloom Select Income or generate 0.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Bloom Select Income  vs.  Invesco SP International

Bloom Select Income

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Bloom Select Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong fundamental drivers, Bloom Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco SP International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco SP International has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Invesco SP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bloom Select and Invesco SP

The main advantage of trading using opposite Bloom Select and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloom Select position performs unexpectedly, Invesco SP 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 SP will offset losses from the drop in Invesco SP's long position.

The idea behind Bloom Select Income and Invesco SP International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.