Correlation Between SPDR Kensho and Procure Space
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and Procure Space 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 Procure Space 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 Procure Space ETF, you can compare the effects of market volatilities on SPDR Kensho and Procure Space 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 Procure Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and Procure Space.
Diversification Opportunities for SPDR Kensho and Procure Space
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Procure is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and Procure Space ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procure Space ETF 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 Procure Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procure Space ETF has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and Procure Space go up and down completely randomly.
Pair Corralation between SPDR Kensho and Procure Space
Given the investment horizon of 90 days SPDR Kensho is expected to generate 2.76 times less return on investment than Procure Space. But when comparing it to its historical volatility, SPDR Kensho New is 1.3 times less risky than Procure Space. It trades about 0.2 of its potential returns per unit of risk. Procure Space ETF is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,935 in Procure Space ETF on August 27, 2024 and sell it today you would earn a total of 353.00 from holding Procure Space ETF or generate 18.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho New vs. Procure Space ETF
Performance |
| Timeline |
| SPDR Kensho New |
| Procure Space ETF |
SPDR Kensho and Procure Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and Procure Space
The main advantage of trading using opposite SPDR Kensho and Procure Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, Procure Space 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 Procure Space will offset losses from the drop in Procure Space'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 |
| Procure Space vs. SPDR SP Kensho | Procure Space vs. ARK Space Exploration | Procure Space vs. Iridium Communications | Procure Space vs. The 3D Printing |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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