Correlation Between Invesco SP and Select STOXX
Can any of the company-specific risk be diversified away by investing in both Invesco SP and Select STOXX 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 SP and Select STOXX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP Global and Select STOXX Europe, you can compare the effects of market volatilities on Invesco SP and Select STOXX 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 SP with a short position of Select STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Select STOXX.
Diversification Opportunities for Invesco SP and Select STOXX
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and Select is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP Global and Select STOXX Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select STOXX Europe and Invesco SP 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 SP Global are associated (or correlated) with Select STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select STOXX Europe has no effect on the direction of Invesco SP i.e., Invesco SP and Select STOXX go up and down completely randomly.
Pair Corralation between Invesco SP and Select STOXX
Considering the 90-day investment horizon Invesco SP Global is expected to under-perform the Select STOXX. But the etf apears to be less risky and, when comparing its historical volatility, Invesco SP Global is 1.48 times less risky than Select STOXX. The etf trades about -0.11 of its potential returns per unit of risk. The Select STOXX Europe is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,517 in Select STOXX Europe on December 2, 2024 and sell it today you would earn a total of 576.00 from holding Select STOXX Europe or generate 22.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Invesco SP Global vs. Select STOXX Europe
Performance |
Timeline |
Invesco SP Global |
Select STOXX Europe |
Invesco SP and Select STOXX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Invesco SP and Select STOXX
The main advantage of trading using opposite Invesco SP and Select STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, Select STOXX 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 Select STOXX will offset losses from the drop in Select STOXX's long position.Invesco SP vs. First Trust Water | Invesco SP vs. Invesco Global Water | Invesco SP vs. Invesco Water Resources | Invesco SP vs. Consolidated Water Co |
Select STOXX vs. Ultimus Managers Trust | Select STOXX vs. American Beacon Select | Select STOXX vs. First Trust Indxx | Select STOXX vs. Direxion Daily Regional |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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