Correlation Between Inverse Sp and Stocksplus
Can any of the company-specific risk be diversified away by investing in both Inverse Sp and Stocksplus 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 Inverse Sp and Stocksplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse Sp 500 and Stocksplus Tr Short, you can compare the effects of market volatilities on Inverse Sp and Stocksplus 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 Inverse Sp with a short position of Stocksplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse Sp and Stocksplus.
Diversification Opportunities for Inverse Sp and Stocksplus
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Inverse and Stocksplus is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Inverse Sp 500 and Stocksplus Tr Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stocksplus Tr Short and Inverse 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 Inverse Sp 500 are associated (or correlated) with Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stocksplus Tr Short has no effect on the direction of Inverse Sp i.e., Inverse Sp and Stocksplus go up and down completely randomly.
Pair Corralation between Inverse Sp and Stocksplus
Assuming the 90 days horizon Inverse Sp 500 is expected to under-perform the Stocksplus. In addition to that, Inverse Sp is 1.05 times more volatile than Stocksplus Tr Short. It trades about -0.08 of its total potential returns per unit of risk. Stocksplus Tr Short is currently generating about -0.02 per unit of volatility. If you would invest 693.00 in Stocksplus Tr Short on September 12, 2024 and sell it today you would lose (2.00) from holding Stocksplus Tr Short or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse Sp 500 vs. Stocksplus Tr Short
Performance |
| Timeline |
| Inverse Sp 500 |
| Stocksplus Tr Short |
Inverse Sp and Stocksplus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse Sp and Stocksplus
The main advantage of trading using opposite Inverse Sp and Stocksplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse Sp position performs unexpectedly, Stocksplus 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 Stocksplus will offset losses from the drop in Stocksplus' long position.| Inverse Sp vs. Dimensional Retirement Income | Inverse Sp vs. Jpmorgan Smartretirement 2035 | Inverse Sp vs. Saat Moderate Strategy | Inverse Sp vs. Pro Blend Moderate Term |
| Stocksplus vs. Grizzly Short Fund | Stocksplus vs. Inverse Sp 500 | Stocksplus vs. HUMANA INC | Stocksplus vs. Barloworld Ltd ADR |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stocks Directory Find actively traded stocks across global markets |