Correlation Between Invesco Solar and SPDR Barclays

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

By analyzing existing cross correlation between Invesco Solar Energy and SPDR Barclays 10, you can compare the effects of market volatilities on Invesco Solar and SPDR Barclays 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 Solar with a short position of SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Solar and SPDR Barclays.

Diversification Opportunities for Invesco Solar and SPDR Barclays

0.35

Correlation Coefficient

Invesco Solar  SPDR Barclays

Weak diversification

The 3 months correlation between Invesco and SPDR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Solar Energy and SPDR Barclays 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays 10 and Invesco Solar 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 Solar Energy are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays 10 has no effect on the direction of Invesco Solar i.e., Invesco Solar and SPDR Barclays go up and down completely randomly.

Pair Corralation between Invesco Solar and SPDR Barclays

Assuming the 90 days trading horizon Invesco Solar Energy is expected to generate 5.28 times more return on investment than SPDR Barclays. However, Invesco Solar is 5.28 times more volatile than SPDR Barclays 10. It trades about 0.18 of its potential returns per unit of risk. SPDR Barclays 10 is currently generating about 0.06 per unit of risk. If you would invest  1,541  in Invesco Solar Energy on April 25, 2025 and sell it today you would earn a total of  500.00  from holding Invesco Solar Energy or generate 32.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Invesco Solar Energy  vs.  SPDR Barclays 10

Invesco Solar Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Solar Energy are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Invesco Solar unveiled solid returns over the last few months and may actually be approaching a breakup point.

SPDR Barclays 10

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Barclays 10 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SPDR Barclays is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Invesco Solar and SPDR Barclays

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

The idea behind Invesco Solar Energy and SPDR Barclays 10 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.