Correlation Between SPDR SP and InfraCap Equity
Can any of the company-specific risk be diversified away by investing in both SPDR SP and InfraCap Equity 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 InfraCap Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Dividend and InfraCap Equity Income, you can compare the effects of market volatilities on SPDR SP and InfraCap Equity 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 InfraCap Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and InfraCap Equity.
Diversification Opportunities for SPDR SP and InfraCap Equity
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and InfraCap is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Dividend and InfraCap Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfraCap Equity Income 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 Dividend are associated (or correlated) with InfraCap Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfraCap Equity Income has no effect on the direction of SPDR SP i.e., SPDR SP and InfraCap Equity go up and down completely randomly.
Pair Corralation between SPDR SP and InfraCap Equity
Considering the 90-day investment horizon SPDR SP Dividend is expected to generate 0.9 times more return on investment than InfraCap Equity. However, SPDR SP Dividend is 1.12 times less risky than InfraCap Equity. It trades about 0.13 of its potential returns per unit of risk. InfraCap Equity Income is currently generating about 0.1 per unit of risk. If you would invest 13,210 in SPDR SP Dividend on November 1, 2024 and sell it today you would earn a total of 313.00 from holding SPDR SP Dividend or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Dividend vs. InfraCap Equity Income
Performance |
| Timeline |
| SPDR SP Dividend |
| InfraCap Equity Income |
SPDR SP and InfraCap Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and InfraCap Equity
The main advantage of trading using opposite SPDR SP and InfraCap Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, InfraCap Equity 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 InfraCap Equity will offset losses from the drop in InfraCap Equity's long position.| SPDR SP vs. iShares Select Dividend | SPDR SP vs. Vanguard Dividend Appreciation | SPDR SP vs. Vanguard High Dividend | SPDR SP vs. ProShares SP 500 |
| InfraCap Equity vs. WisdomTree International Al | InfraCap Equity vs. QRAFT AI Enhanced Large | InfraCap Equity vs. WisdomTree Trust | InfraCap Equity vs. QRAFT AI Enhanced Large |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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