Correlation Between SSgA and Invesco SP

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

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

Diversification Opportunities for SSgA and Invesco SP

0.0

Correlation Coefficient

SSgA  Invesco SP

Pay attention - limited upside

The 3 months correlation between SSgA and Invesco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SSgA and Invesco SP MidCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP MidCap and SSgA 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 SSgA 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 MidCap has no effect on the direction of SSgA i.e., SSgA and Invesco SP go up and down completely randomly.

Pair Corralation between SSgA and Invesco SP

If you would invest (100.00) in SSgA on February 1, 2024 and sell it today you would earn a total of  100.00  from holding SSgA or generate -100.0% return on investment over 90 days.

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

SSgA  vs.  Invesco SP MidCap

SSgA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Invesco SP MidCap

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco SP MidCap are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Invesco SP may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with SSgA and Invesco SP

The main advantage of trading using opposite SSgA and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA 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.

The idea behind SSgA and Invesco SP MidCap 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.