Correlation Between Invesco SP and Invesco Markets

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

By analyzing existing cross correlation between Invesco SP 500 and Invesco Markets Plc, you can compare the effects of market volatilities on Invesco SP and Invesco Markets 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 Invesco Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Invesco Markets.

Diversification Opportunities for Invesco SP and Invesco Markets

-0.28

Correlation Coefficient

Invesco SP  Invesco Markets

Very good diversification

The 3 months correlation between Invesco and Invesco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP 500 and Invesco Markets Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Markets Plc 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 500 are associated (or correlated) with Invesco Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Markets Plc has no effect on the direction of Invesco SP i.e., Invesco SP and Invesco Markets go up and down completely randomly.

Pair Corralation between Invesco SP and Invesco Markets

If you would invest  4,370  in Invesco Markets Plc on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Invesco Markets Plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Invesco SP 500  vs.  Invesco Markets Plc

Invesco SP 500

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Etf's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Invesco Markets Plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Invesco SP and Invesco Markets

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

The idea behind Invesco SP 500 and Invesco Markets Plc 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 Transaction History module to view history of all your transactions and understand their impact on performance.