Correlation Between Kovitz Core and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Kovitz Core and SPDR 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 Kovitz Core and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kovitz Core Equity and SPDR SP 500, you can compare the effects of market volatilities on Kovitz Core and SPDR 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 Kovitz Core with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kovitz Core and SPDR SP.
Diversification Opportunities for Kovitz Core and SPDR SP
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kovitz and SPDR is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Kovitz Core Equity and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and Kovitz Core 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 Kovitz Core Equity are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of Kovitz Core i.e., Kovitz Core and SPDR SP go up and down completely randomly.
Pair Corralation between Kovitz Core and SPDR SP
Given the investment horizon of 90 days Kovitz Core is expected to generate 1.08 times less return on investment than SPDR SP. In addition to that, Kovitz Core is 1.07 times more volatile than SPDR SP 500. It trades about 0.1 of its total potential returns per unit of risk. SPDR SP 500 is currently generating about 0.11 per unit of volatility. If you would invest 38,796 in SPDR SP 500 on September 4, 2024 and sell it today you would earn a total of 21,567 from holding SPDR SP 500 or generate 55.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kovitz Core Equity vs. SPDR SP 500
Performance |
| Timeline |
| Kovitz Core Equity |
| SPDR SP 500 |
Kovitz Core and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kovitz Core and SPDR SP
The main advantage of trading using opposite Kovitz Core and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kovitz Core position performs unexpectedly, SPDR 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Kovitz Core vs. ProShares Global Listed | Kovitz Core vs. Israel Acquisitions Corp | Kovitz Core vs. Columbia ETF Trust | Kovitz Core vs. Eaton Vance Short |
| SPDR SP vs. SPDR Gold Shares | SPDR SP vs. Vanguard Real Estate | SPDR SP vs. Vanguard Total Stock | SPDR SP vs. Vanguard FTSE Emerging |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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