Correlation Between ProShares Global and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both ProShares Global and SPDR Kensho 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 ProShares Global and SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Global Listed and SPDR Kensho New, you can compare the effects of market volatilities on ProShares Global and SPDR Kensho 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 ProShares Global with a short position of SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Global and SPDR Kensho.
Diversification Opportunities for ProShares Global and SPDR Kensho
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and SPDR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Global Listed and SPDR Kensho New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho New and ProShares Global 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 ProShares Global Listed are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho New has no effect on the direction of ProShares Global i.e., ProShares Global and SPDR Kensho go up and down completely randomly.
Pair Corralation between ProShares Global and SPDR Kensho
Considering the 90-day investment horizon ProShares Global is expected to generate 1.04 times less return on investment than SPDR Kensho. But when comparing it to its historical volatility, ProShares Global Listed is 1.45 times less risky than SPDR Kensho. It trades about 0.07 of its potential returns per unit of risk. SPDR Kensho New is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,072 in SPDR Kensho New on September 3, 2024 and sell it today you would earn a total of 1,378 from holding SPDR Kensho New or generate 33.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Global Listed vs. SPDR Kensho New
Performance |
| Timeline |
| ProShares Global Listed |
| SPDR Kensho New |
ProShares Global and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Global and SPDR Kensho
The main advantage of trading using opposite ProShares Global and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Global position performs unexpectedly, SPDR Kensho 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 Kensho will offset losses from the drop in SPDR Kensho's long position.| ProShares Global vs. Invesco Global Listed | ProShares Global vs. ProShares Merger ETF | ProShares Global vs. VanEck BDC Income | ProShares Global vs. ProShares Hedge Replication |
| SPDR Kensho vs. SPDR Kensho Clean | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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