Correlation Between Invesco SP and Columbia Sustainable

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

By analyzing existing cross correlation between Invesco SP 100 and Columbia Sustainable Equity, you can compare the effects of market volatilities on Invesco SP and Columbia Sustainable 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 Columbia Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Columbia Sustainable.

Diversification Opportunities for Invesco SP and Columbia Sustainable

0.0

Correlation Coefficient

Invesco SP  Columbia Sustainable

Pay attention - limited upside

The 3 months correlation between Invesco and Columbia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 100 and Columbia Sustainable Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sustainable 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 100 are associated (or correlated) with Columbia Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sustainable has no effect on the direction of Invesco SP i.e., Invesco SP and Columbia Sustainable go up and down completely randomly.

Pair Corralation between Invesco SP and Columbia Sustainable

If you would invest  10,280  in Invesco SP 100 on December 21, 2024 and sell it today you would earn a total of  113.00  from holding Invesco SP 100 or generate 1.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Invesco SP 100  vs.  Columbia Sustainable Equity

Invesco SP 100

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco SP 100 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Invesco SP is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Columbia Sustainable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Sustainable Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Columbia Sustainable is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco SP and Columbia Sustainable

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

The idea behind Invesco SP 100 and Columbia Sustainable Equity 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.