Correlation Between SPDR Kensho and IShares
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and IShares 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 Kensho and IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho New and IShares, you can compare the effects of market volatilities on SPDR Kensho and IShares 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 Kensho with a short position of IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and IShares.
Diversification Opportunities for SPDR Kensho and IShares
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares and SPDR Kensho 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 Kensho New are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and IShares go up and down completely randomly.
Pair Corralation between SPDR Kensho and IShares
If you would invest 4,918 in SPDR Kensho New on September 1, 2024 and sell it today you would earn a total of 532.00 from holding SPDR Kensho New or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
SPDR Kensho New vs. IShares
Performance |
| Timeline |
| SPDR Kensho New |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR Kensho and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and IShares
The main advantage of trading using opposite SPDR Kensho and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, IShares 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 will offset losses from the drop in IShares' long position.The idea behind SPDR Kensho New and IShares 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.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |