Correlation Between BetaPro SP and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both BetaPro SP and IShares SPTSX 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 BetaPro SP and IShares SPTSX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SP 500 and iShares SPTSX Capped, you can compare the effects of market volatilities on BetaPro SP and IShares SPTSX 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 BetaPro SP with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and IShares SPTSX.
Diversification Opportunities for BetaPro SP and IShares SPTSX
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and IShares is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 and iShares SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Capped and BetaPro 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 BetaPro SP 500 are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Capped has no effect on the direction of BetaPro SP i.e., BetaPro SP and IShares SPTSX go up and down completely randomly.
Pair Corralation between BetaPro SP and IShares SPTSX
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the IShares SPTSX. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SP 500 is 2.31 times less risky than IShares SPTSX. The etf trades about -0.32 of its potential returns per unit of risk. The iShares SPTSX Capped is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 5,863 in iShares SPTSX Capped on September 4, 2024 and sell it today you would earn a total of 1,116 from holding iShares SPTSX Capped or generate 19.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SP 500 vs. iShares SPTSX Capped
Performance |
| Timeline |
| BetaPro SP 500 |
| iShares SPTSX Capped |
BetaPro SP and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and IShares SPTSX
The main advantage of trading using opposite BetaPro SP and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP position performs unexpectedly, IShares SPTSX 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 IShares SPTSX will offset losses from the drop in IShares SPTSX's long position.| BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro NASDAQ 100 2x | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro Gold Bullion |
| IShares SPTSX vs. International Zeolite Corp | IShares SPTSX vs. European Residential Real | IShares SPTSX vs. Financial 15 Split | IShares SPTSX vs. Rubicon Organics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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