Correlation Between SPDR Russell and Clarkston Founders
Can any of the company-specific risk be diversified away by investing in both SPDR Russell and Clarkston Founders 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 Russell and Clarkston Founders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Russell 1000 and Clarkston Founders, you can compare the effects of market volatilities on SPDR Russell and Clarkston Founders 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 Russell with a short position of Clarkston Founders. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Clarkston Founders.
Diversification Opportunities for SPDR Russell and Clarkston Founders
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Clarkston is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Clarkston Founders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkston Founders and SPDR Russell 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 Russell 1000 are associated (or correlated) with Clarkston Founders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkston Founders has no effect on the direction of SPDR Russell i.e., SPDR Russell and Clarkston Founders go up and down completely randomly.
Pair Corralation between SPDR Russell and Clarkston Founders
Given the investment horizon of 90 days SPDR Russell 1000 is expected to generate 1.07 times more return on investment than Clarkston Founders. However, SPDR Russell is 1.07 times more volatile than Clarkston Founders. It trades about 0.11 of its potential returns per unit of risk. Clarkston Founders is currently generating about 0.07 per unit of risk. If you would invest 10,054 in SPDR Russell 1000 on September 1, 2024 and sell it today you would earn a total of 1,682 from holding SPDR Russell 1000 or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
SPDR Russell 1000 vs. Clarkston Founders
Performance |
| Timeline |
| SPDR Russell 1000 |
| Clarkston Founders |
SPDR Russell and Clarkston Founders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and Clarkston Founders
The main advantage of trading using opposite SPDR Russell and Clarkston Founders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell position performs unexpectedly, Clarkston Founders 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 Clarkston Founders will offset losses from the drop in Clarkston Founders' long position.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR SP 400 | SPDR Russell vs. SPDR MSCI EAFE |
| Clarkston Founders vs. Clarkston Partners Fund | Clarkston Founders vs. Clarkston Founders Fund | Clarkston Founders vs. Clarkston Fund Institutional | Clarkston Founders vs. Clarkston Partners Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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