Correlation Between SPDR Kensho and VanEck Low
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and VanEck Low 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 Kensho and VanEck Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho Clean and VanEck Low Carbon, you can compare the effects of market volatilities on SPDR Kensho and VanEck Low 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 Kensho with a short position of VanEck Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and VanEck Low.
Diversification Opportunities for SPDR Kensho and VanEck Low
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and VanEck is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho Clean and VanEck Low Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Low Carbon and SPDR Kensho 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 Kensho Clean are associated (or correlated) with VanEck Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Low Carbon has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and VanEck Low go up and down completely randomly.
Pair Corralation between SPDR Kensho and VanEck Low
Given the investment horizon of 90 days SPDR Kensho Clean is expected to under-perform the VanEck Low. In addition to that, SPDR Kensho is 1.37 times more volatile than VanEck Low Carbon. It trades about -0.03 of its total potential returns per unit of risk. VanEck Low Carbon is currently generating about -0.02 per unit of volatility. If you would invest 11,951 in VanEck Low Carbon on August 24, 2024 and sell it today you would lose (1,889) from holding VanEck Low Carbon or give up 15.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho Clean vs. VanEck Low Carbon
Performance |
| Timeline |
| SPDR Kensho Clean |
| VanEck Low Carbon |
SPDR Kensho and VanEck Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and VanEck Low
The main advantage of trading using opposite SPDR Kensho and VanEck Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, VanEck Low 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 VanEck Low will offset losses from the drop in VanEck Low's long position.| SPDR Kensho vs. EA Series Trust | SPDR Kensho vs. EA Series Trust | SPDR Kensho vs. Rumble Inc | SPDR Kensho vs. EA Series Trust |
| VanEck Low vs. ALPS Clean Energy | VanEck Low vs. SPDR Kensho Clean | VanEck Low vs. Invesco Global Clean | VanEck Low vs. First Trust NASDAQ |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |