Correlation Between US Global and SPDR SP
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Jets and SPDR SP Aerospace, you can compare the effects of market volatilities on US Global 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 US Global with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and SPDR SP.
Diversification Opportunities for US Global and SPDR SP
Poor diversification
The 3 months correlation between JETS and SPDR is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding US Global Jets and SPDR SP Aerospace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Aerospace and US Global 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 US Global Jets 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 Aerospace has no effect on the direction of US Global i.e., US Global and SPDR SP go up and down completely randomly.
Pair Corralation between US Global and SPDR SP
Given the investment horizon of 90 days US Global is expected to generate 1.8 times less return on investment than SPDR SP. But when comparing it to its historical volatility, US Global Jets is 1.26 times less risky than SPDR SP. It trades about 0.23 of its potential returns per unit of risk. SPDR SP Aerospace is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 16,573 in SPDR SP Aerospace on October 24, 2024 and sell it today you would earn a total of 1,503 from holding SPDR SP Aerospace or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Jets vs. SPDR SP Aerospace
Performance |
| Timeline |
| US Global Jets |
| SPDR SP Aerospace |
US Global and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and SPDR SP
The main advantage of trading using opposite US Global and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Invesco Solar ETF | US Global vs. iShares Global Clean | US Global vs. iShares Semiconductor ETF | US Global vs. Amplify ETF Trust |
| SPDR SP vs. Invesco Aerospace Defense | SPDR SP vs. iShares Aerospace Defense | SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Transportation |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Positions Ratings 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 |