Correlation Between SPDR SP and FT Vest
Can any of the company-specific risk be diversified away by investing in both SPDR SP and FT Vest 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 SP and FT Vest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP International and FT Vest Equity, you can compare the effects of market volatilities on SPDR SP and FT Vest 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 SP with a short position of FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and FT Vest.
Diversification Opportunities for SPDR SP and FT Vest
Very weak diversification
The 3 months correlation between SPDR and DHDG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP International and FT Vest Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Equity and SPDR SP 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 SP International are associated (or correlated) with FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Equity has no effect on the direction of SPDR SP i.e., SPDR SP and FT Vest go up and down completely randomly.
Pair Corralation between SPDR SP and FT Vest
Considering the 90-day investment horizon SPDR SP is expected to generate 1.67 times less return on investment than FT Vest. In addition to that, SPDR SP is 2.29 times more volatile than FT Vest Equity. It trades about 0.05 of its total potential returns per unit of risk. FT Vest Equity is currently generating about 0.18 per unit of volatility. If you would invest 3,038 in FT Vest Equity on September 3, 2024 and sell it today you would earn a total of 65.00 from holding FT Vest Equity or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 12.15% |
| Values | Daily Returns |
SPDR SP International vs. FT Vest Equity
Performance |
| Timeline |
| SPDR SP International |
| FT Vest Equity |
SPDR SP and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and FT Vest
The main advantage of trading using opposite SPDR SP and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest's long position.| SPDR SP vs. FT Vest Equity | SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. JPMorgan Fundamental Data |
| FT Vest vs. Vanguard Total Stock | FT Vest vs. SPDR SP 500 | FT Vest vs. Vanguard Total Bond | FT Vest vs. Vanguard Value Index |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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