Correlation Between SPDR SP and Via Renewables
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Via Renewables 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 Via Renewables 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 Via Renewables, you can compare the effects of market volatilities on SPDR SP and Via Renewables 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 Via Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Via Renewables.
Diversification Opportunities for SPDR SP and Via Renewables
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SPDR and Via is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Dividend and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of SPDR SP i.e., SPDR SP and Via Renewables go up and down completely randomly.
Pair Corralation between SPDR SP and Via Renewables
Considering the 90-day investment horizon SPDR SP Dividend is expected to generate 0.63 times more return on investment than Via Renewables. However, SPDR SP Dividend is 1.58 times less risky than Via Renewables. It trades about 0.38 of its potential returns per unit of risk. Via Renewables is currently generating about 0.24 per unit of risk. If you would invest 13,813 in SPDR SP Dividend on September 3, 2024 and sell it today you would earn a total of 587.00 from holding SPDR SP Dividend or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Dividend vs. Via Renewables
Performance |
| Timeline |
| SPDR SP Dividend |
| Via Renewables |
SPDR SP and Via Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Via Renewables
The main advantage of trading using opposite SPDR SP and Via Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Via Renewables 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 Via Renewables will offset losses from the drop in Via Renewables' 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 |
| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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