Correlation Between SPASX Dividend and SPDR SPASX
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and SPDR SPASX 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 SPASX Dividend and SPDR SPASX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX Dividend Opportunities and SPDR SPASX 50, you can compare the effects of market volatilities on SPASX Dividend and SPDR SPASX 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 SPASX Dividend with a short position of SPDR SPASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and SPDR SPASX.
Diversification Opportunities for SPASX Dividend and SPDR SPASX
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPASX and SPDR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and SPDR SPASX 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SPASX 50 and SPASX Dividend 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 SPASX Dividend Opportunities are associated (or correlated) with SPDR SPASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SPASX 50 has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and SPDR SPASX go up and down completely randomly.
Pair Corralation between SPASX Dividend and SPDR SPASX
Assuming the 90 days trading horizon SPASX Dividend is expected to generate 2.18 times less return on investment than SPDR SPASX. But when comparing it to its historical volatility, SPASX Dividend Opportunities is 1.01 times less risky than SPDR SPASX. It trades about 0.03 of its potential returns per unit of risk. SPDR SPASX 50 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,892 in SPDR SPASX 50 on August 29, 2024 and sell it today you would earn a total of 1,578 from holding SPDR SPASX 50 or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. SPDR SPASX 50
Performance |
| Timeline |
SPASX Dividend and SPDR SPASX Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
SPDR SPASX 50
Pair trading matchups for SPDR SPASX
Pair Trading with SPASX Dividend and SPDR SPASX
The main advantage of trading using opposite SPASX Dividend and SPDR SPASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, SPDR SPASX 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 SPASX will offset losses from the drop in SPDR SPASX's long position.| SPASX Dividend vs. Clime Investment Management | SPASX Dividend vs. Garda Diversified Ppty | SPASX Dividend vs. Genetic Technologies | SPASX Dividend vs. Neurotech International |
| SPDR SPASX vs. SPDR SP 500 | SPDR SPASX vs. Vanguard Total Market | SPDR SPASX vs. iShares Core SP | SPDR SPASX vs. iShares Core SP |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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