Correlation Between Series Portfolios and Invesco SP
Can any of the company-specific risk be diversified away by investing in both Series Portfolios 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 Series Portfolios and Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Series Portfolios Trust and Invesco SP 100, you can compare the effects of market volatilities on Series Portfolios 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 Series Portfolios with a short position of Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Series Portfolios and Invesco SP.
Diversification Opportunities for Series Portfolios and Invesco SP
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Series and Invesco is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Series Portfolios Trust and Invesco SP 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 100 and Series Portfolios 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 Series Portfolios Trust 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 100 has no effect on the direction of Series Portfolios i.e., Series Portfolios and Invesco SP go up and down completely randomly.
Pair Corralation between Series Portfolios and Invesco SP
Given the investment horizon of 90 days Series Portfolios Trust is expected to under-perform the Invesco SP. In addition to that, Series Portfolios is 1.57 times more volatile than Invesco SP 100. It trades about -0.22 of its total potential returns per unit of risk. Invesco SP 100 is currently generating about -0.28 per unit of volatility. If you would invest 9,383 in Invesco SP 100 on January 20, 2024 and sell it today you would lose (356.00) from holding Invesco SP 100 or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Series Portfolios Trust vs. Invesco SP 100
Performance |
| Timeline |
| Series Portfolios Trust |
| Invesco SP 100 |
Series Portfolios and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Series Portfolios and Invesco SP
The main advantage of trading using opposite Series Portfolios and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Series Portfolios 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.| Series Portfolios vs. Vanguard Mid Cap Index | Series Portfolios vs. Vanguard Small Cap Value | Series Portfolios vs. Vanguard FTSE Emerging | Series Portfolios vs. Vanguard Large Cap Index |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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