Correlation Between SPDR SP and Gabelli ETFs
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Gabelli ETFs 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 SP and Gabelli ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP MIDCAP and Gabelli ETFs Trust, you can compare the effects of market volatilities on SPDR SP and Gabelli ETFs 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 SP with a short position of Gabelli ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Gabelli ETFs.
Diversification Opportunities for SPDR SP and Gabelli ETFs
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Gabelli is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP MIDCAP and Gabelli ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli ETFs Trust and SPDR SP 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 SP MIDCAP are associated (or correlated) with Gabelli ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli ETFs Trust has no effect on the direction of SPDR SP i.e., SPDR SP and Gabelli ETFs go up and down completely randomly.
Pair Corralation between SPDR SP and Gabelli ETFs
Considering the 90-day investment horizon SPDR SP MIDCAP is expected to generate 1.44 times more return on investment than Gabelli ETFs. However, SPDR SP is 1.44 times more volatile than Gabelli ETFs Trust. It trades about 0.29 of its potential returns per unit of risk. Gabelli ETFs Trust is currently generating about 0.37 per unit of risk. If you would invest 56,767 in SPDR SP MIDCAP on August 26, 2024 and sell it today you would earn a total of 4,304 from holding SPDR SP MIDCAP or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP MIDCAP vs. Gabelli ETFs Trust
Performance |
| Timeline |
| SPDR SP MIDCAP |
| Gabelli ETFs Trust |
SPDR SP and Gabelli ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Gabelli ETFs
The main advantage of trading using opposite SPDR SP and Gabelli ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Gabelli ETFs 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 Gabelli ETFs will offset losses from the drop in Gabelli ETFs' long position.| SPDR SP vs. iShares Core SP | SPDR SP vs. iShares Russell 2000 | SPDR SP vs. iShares MSCI EAFE | SPDR SP vs. iShares Russell 2000 |
| Gabelli ETFs vs. Vanguard Mid Cap Index | Gabelli ETFs vs. Vanguard Extended Market | Gabelli ETFs vs. iShares Core SP | Gabelli ETFs vs. SPDR SP MIDCAP |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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