Correlation Between BetaPro SPTSX and Global Dividend
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and Global Dividend 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 SPTSX and Global Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SPTSX 60 and Global Dividend Growth, you can compare the effects of market volatilities on BetaPro SPTSX and Global Dividend 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 SPTSX with a short position of Global Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Global Dividend.
Diversification Opportunities for BetaPro SPTSX and Global Dividend
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and Global is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and Global Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Dividend Growth and BetaPro SPTSX 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 SPTSX 60 are associated (or correlated) with Global Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Dividend Growth has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Global Dividend go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and Global Dividend
Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the Global Dividend. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SPTSX 60 is 1.35 times less risky than Global Dividend. The etf trades about -0.55 of its potential returns per unit of risk. The Global Dividend Growth is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,074 in Global Dividend Growth on September 5, 2024 and sell it today you would earn a total of 132.00 from holding Global Dividend Growth or generate 12.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BetaPro SPTSX 60 vs. Global Dividend Growth
Performance |
| Timeline |
| BetaPro SPTSX 60 |
| Global Dividend Growth |
BetaPro SPTSX and Global Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SPTSX and Global Dividend
The main advantage of trading using opposite BetaPro SPTSX and Global Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX position performs unexpectedly, Global Dividend 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 Global Dividend will offset losses from the drop in Global Dividend's long position.The idea behind BetaPro SPTSX 60 and Global Dividend Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Global Dividend vs. BetaPro SPTSX Capped | Global Dividend vs. BetaPro SPTSX 60 | Global Dividend vs. BetaPro SP 500 | Global Dividend vs. BetaPro NASDAQ 100 2x |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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