Correlation Between SPDR DoubleLine and Invesco FTSE
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and Invesco FTSE 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 SPDR DoubleLine and Invesco FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Short and Invesco FTSE RAFI, you can compare the effects of market volatilities on SPDR DoubleLine and Invesco FTSE 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 SPDR DoubleLine with a short position of Invesco FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and Invesco FTSE.
Diversification Opportunities for SPDR DoubleLine and Invesco FTSE
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Invesco is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and Invesco FTSE RAFI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco FTSE RAFI and SPDR DoubleLine 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 SPDR DoubleLine Short are associated (or correlated) with Invesco FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco FTSE RAFI has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and Invesco FTSE go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and Invesco FTSE
Given the investment horizon of 90 days SPDR DoubleLine Short is expected to generate 0.13 times more return on investment than Invesco FTSE. However, SPDR DoubleLine Short is 7.95 times less risky than Invesco FTSE. It trades about -0.09 of its potential returns per unit of risk. Invesco FTSE RAFI is currently generating about -0.14 per unit of risk. If you would invest 4,676 in SPDR DoubleLine Short on January 24, 2024 and sell it today you would lose (8.00) from holding SPDR DoubleLine Short or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPDR DoubleLine Short vs. Invesco FTSE RAFI
Performance |
| Timeline |
| SPDR DoubleLine Short |
| Invesco FTSE RAFI |
SPDR DoubleLine and Invesco FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and Invesco FTSE
The main advantage of trading using opposite SPDR DoubleLine and Invesco FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, Invesco FTSE 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 FTSE will offset losses from the drop in Invesco FTSE's long position.| SPDR DoubleLine vs. SPDR DoubleLine Emerging | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR Bloomberg 1 10 | SPDR DoubleLine vs. SPDR DoubleLine Total |
| Invesco FTSE vs. Northern Lights | Invesco FTSE vs. HUMANA INC | Invesco FTSE vs. Aquagold International | Invesco FTSE vs. Barloworld Ltd ADR |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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