Correlation Between SPDR Kensho and VanEck Low
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and VanEck Low 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 VanEck Low 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 VanEck Low Carbon, you can compare the effects of market volatilities on SPDR Kensho and VanEck Low 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 VanEck Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and VanEck Low.
Diversification Opportunities for SPDR Kensho and VanEck Low
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and VanEck is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and VanEck Low Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Low Carbon 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 VanEck Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Low Carbon has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and VanEck Low go up and down completely randomly.
Pair Corralation between SPDR Kensho and VanEck Low
Given the investment horizon of 90 days SPDR Kensho New is expected to generate 0.89 times more return on investment than VanEck Low. However, SPDR Kensho New is 1.13 times less risky than VanEck Low. It trades about 0.2 of its potential returns per unit of risk. VanEck Low Carbon is currently generating about -0.13 per unit of risk. If you would invest 4,826 in SPDR Kensho New on August 26, 2024 and sell it today you would earn a total of 523.00 from holding SPDR Kensho New or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho New vs. VanEck Low Carbon
Performance |
| Timeline |
| SPDR Kensho New |
| VanEck Low Carbon |
SPDR Kensho and VanEck Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and VanEck Low
The main advantage of trading using opposite SPDR Kensho and VanEck Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, VanEck Low 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 VanEck Low will offset losses from the drop in VanEck Low's long position.| SPDR Kensho vs. SPDR Kensho Clean | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho |
| VanEck Low vs. SPDR Kensho New | VanEck Low vs. Global X FinTech | VanEck Low vs. iShares Genomics Immunology | VanEck Low vs. Aquagold International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance |