Correlation Between SF Sustainable and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both SF Sustainable and SPDR Dow 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 SF Sustainable and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SF Sustainable Property and SPDR Dow Jones, you can compare the effects of market volatilities on SF Sustainable and SPDR Dow 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 SF Sustainable with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of SF Sustainable and SPDR Dow.
Diversification Opportunities for SF Sustainable and SPDR Dow
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SFPF and SPDR is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SF Sustainable Property and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and SF Sustainable 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 SF Sustainable Property are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of SF Sustainable i.e., SF Sustainable and SPDR Dow go up and down completely randomly.
Pair Corralation between SF Sustainable and SPDR Dow
Assuming the 90 days trading horizon SF Sustainable is expected to generate 1.71 times less return on investment than SPDR Dow. In addition to that, SF Sustainable is 1.17 times more volatile than SPDR Dow Jones. It trades about 0.03 of its total potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.07 per unit of volatility. If you would invest 1,564 in SPDR Dow Jones on September 4, 2024 and sell it today you would earn a total of 237.00 from holding SPDR Dow Jones or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SF Sustainable Property vs. SPDR Dow Jones
Performance |
| Timeline |
| SF Sustainable Property |
| SPDR Dow Jones |
SF Sustainable and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SF Sustainable and SPDR Dow
The main advantage of trading using opposite SF Sustainable and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SF Sustainable position performs unexpectedly, SPDR Dow 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 Dow will offset losses from the drop in SPDR Dow's long position.| SF Sustainable vs. Swissinvest Real Estate | SF Sustainable vs. CS Real Estate | SF Sustainable vs. Procimmo Real Estate | SF Sustainable vs. UBS Property |
| SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR SP Utilities | SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR MSCI EM |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |