Correlation Between Abrdn Emerging and Invesco SP
Can any of the company-specific risk be diversified away by investing in both Abrdn Emerging 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 Abrdn Emerging and Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between abrdn Emerging Markets and Invesco SP 500, you can compare the effects of market volatilities on Abrdn Emerging 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 Abrdn Emerging with a short position of Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Emerging and Invesco SP.
Diversification Opportunities for Abrdn Emerging and Invesco SP
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abrdn and Invesco is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Emerging Markets and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 and Abrdn Emerging 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 abrdn Emerging Markets 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 500 has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and Invesco SP go up and down completely randomly.
Pair Corralation between Abrdn Emerging and Invesco SP
Given the investment horizon of 90 days abrdn Emerging Markets is expected to generate 1.29 times more return on investment than Invesco SP. However, Abrdn Emerging is 1.29 times more volatile than Invesco SP 500. It trades about 0.09 of its potential returns per unit of risk. Invesco SP 500 is currently generating about 0.01 per unit of risk. If you would invest 3,155 in abrdn Emerging Markets on March 25, 2025 and sell it today you would earn a total of 38.00 from holding abrdn Emerging Markets or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
abrdn Emerging Markets vs. Invesco SP 500
Performance |
| Timeline |
| abrdn Emerging Markets |
| Invesco SP 500 |
Abrdn Emerging and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Emerging and Invesco SP
The main advantage of trading using opposite Abrdn Emerging and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Emerging 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.| Abrdn Emerging vs. Franklin Templeton ETF | Abrdn Emerging vs. Altrius Global Dividend | Abrdn Emerging vs. Invesco Exchange Traded | Abrdn Emerging vs. Franklin International Core |
| Invesco SP vs. iShares Core SP | Invesco SP vs. iShares Russell 1000 | Invesco SP vs. iShares Core SP | Invesco SP vs. iShares SP 500 |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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