Correlation Between Invesco Treasury and Amundi SP

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

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

Diversification Opportunities for Invesco Treasury and Amundi SP

0.68

Correlation Coefficient

Invesco Treasury  Amundi SP

Poor diversification

The 3 months correlation between Invesco and Amundi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Treasury Bond and Amundi SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SP Global and Invesco Treasury 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 Treasury Bond are associated (or correlated) with Amundi SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SP Global has no effect on the direction of Invesco Treasury i.e., Invesco Treasury and Amundi SP go up and down completely randomly.

Pair Corralation between Invesco Treasury and Amundi SP

Assuming the 90 days trading horizon Invesco Treasury Bond is expected to under-perform the Amundi SP. But the etf apears to be less risky and, when comparing its historical volatility, Invesco Treasury Bond is 2.68 times less risky than Amundi SP. The etf trades about -0.01 of its potential returns per unit of risk. The Amundi SP Global is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,194  in Amundi SP Global on October 4, 2024 and sell it today you would earn a total of  222.00  from holding Amundi SP Global or generate 18.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Invesco Treasury Bond  vs.  Amundi SP Global

Invesco Treasury Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Treasury Bond has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Invesco Treasury is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Amundi SP Global

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi SP Global are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward-looking indicators, Amundi SP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Invesco Treasury and Amundi SP

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

The idea behind Invesco Treasury Bond and Amundi SP Global 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.