Correlation Between ClearShares Ultra and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both ClearShares Ultra and SPDR Portfolio 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 ClearShares Ultra and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ClearShares Ultra Short Maturity and SPDR Portfolio Aggregate, you can compare the effects of market volatilities on ClearShares Ultra and SPDR Portfolio 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 ClearShares Ultra with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClearShares Ultra and SPDR Portfolio.
Diversification Opportunities for ClearShares Ultra and SPDR Portfolio
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ClearShares and SPDR is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ClearShares Ultra Short Maturi and SPDR Portfolio Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Aggregate and ClearShares Ultra 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 ClearShares Ultra Short Maturity are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Aggregate has no effect on the direction of ClearShares Ultra i.e., ClearShares Ultra and SPDR Portfolio go up and down completely randomly.
Pair Corralation between ClearShares Ultra and SPDR Portfolio
Given the investment horizon of 90 days ClearShares Ultra is expected to generate 2.5 times less return on investment than SPDR Portfolio. But when comparing it to its historical volatility, ClearShares Ultra Short Maturity is 19.19 times less risky than SPDR Portfolio. It trades about 1.09 of its potential returns per unit of risk. SPDR Portfolio Aggregate is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,515 in SPDR Portfolio Aggregate on September 13, 2024 and sell it today you would earn a total of 23.00 from holding SPDR Portfolio Aggregate or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ClearShares Ultra Short Maturi vs. SPDR Portfolio Aggregate
Performance |
| Timeline |
| ClearShares Ultra Short |
| SPDR Portfolio Aggregate |
ClearShares Ultra and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ClearShares Ultra and SPDR Portfolio
The main advantage of trading using opposite ClearShares Ultra and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ClearShares Ultra position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| ClearShares Ultra vs. iShares Treasury Floating | ClearShares Ultra vs. SPDR Bloomberg Investment | ClearShares Ultra vs. iShares 0 3 Month | ClearShares Ultra vs. SPDR Barclays Short |
| SPDR Portfolio vs. SPDR SP World | SPDR Portfolio vs. SPDR Barclays Intermediate | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio Emerging |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |