Correlation Between SPDR Kensho and Global X
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and Global X 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 Global X 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 Global X Wind, you can compare the effects of market volatilities on SPDR Kensho and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and Global X.
Diversification Opportunities for SPDR Kensho and Global X
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and Global is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and Global X Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Wind 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Wind has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and Global X go up and down completely randomly.
Pair Corralation between SPDR Kensho and Global X
Given the investment horizon of 90 days SPDR Kensho New is expected to generate 0.77 times more return on investment than Global X. However, SPDR Kensho New is 1.3 times less risky than Global X. It trades about 0.07 of its potential returns per unit of risk. Global X Wind is currently generating about -0.02 per unit of risk. If you would invest 4,604 in SPDR Kensho New on August 27, 2024 and sell it today you would earn a total of 745.00 from holding SPDR Kensho New or generate 16.18% 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. Global X Wind
Performance |
| Timeline |
| SPDR Kensho New |
| Global X Wind |
SPDR Kensho and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and Global X
The main advantage of trading using opposite SPDR Kensho and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, Global X 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 X will offset losses from the drop in Global X'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 |
| Global X vs. SPDR Kensho New | Global X vs. Global X FinTech | Global X vs. iShares Genomics Immunology | Global X 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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