Correlation Between SPDR STOXX and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both SPDR STOXX and SPDR Kensho 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 STOXX and SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR STOXX Europe and SPDR Kensho Intelligent, you can compare the effects of market volatilities on SPDR STOXX and SPDR Kensho 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 STOXX with a short position of SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR STOXX and SPDR Kensho.
Diversification Opportunities for SPDR STOXX and SPDR Kensho
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and SPDR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SPDR STOXX Europe and SPDR Kensho Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Intelligent and SPDR STOXX 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 STOXX Europe are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Intelligent has no effect on the direction of SPDR STOXX i.e., SPDR STOXX and SPDR Kensho go up and down completely randomly.
Pair Corralation between SPDR STOXX and SPDR Kensho
Considering the 90-day investment horizon SPDR STOXX Europe is expected to under-perform the SPDR Kensho. But the etf apears to be less risky and, when comparing its historical volatility, SPDR STOXX Europe is 1.53 times less risky than SPDR Kensho. The etf trades about 0.0 of its potential returns per unit of risk. The SPDR Kensho Intelligent is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,394 in SPDR Kensho Intelligent on August 27, 2024 and sell it today you would earn a total of 297.00 from holding SPDR Kensho Intelligent or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR STOXX Europe vs. SPDR Kensho Intelligent
Performance |
| Timeline |
| SPDR STOXX Europe |
| SPDR Kensho Intelligent |
SPDR STOXX and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR STOXX and SPDR Kensho
The main advantage of trading using opposite SPDR STOXX and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR STOXX position performs unexpectedly, SPDR Kensho 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 Kensho will offset losses from the drop in SPDR Kensho's long position.| SPDR STOXX vs. SPDR Bloomberg Barclays | SPDR STOXX vs. SPDR Kensho Future | SPDR STOXX vs. SPDR Kensho Intelligent | SPDR STOXX vs. SPDR SP Kensho |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |