Correlation Between SPDR SPASX and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and SPDR SP 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 SPASX and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 50 and SPDR SP 500, you can compare the effects of market volatilities on SPDR SPASX and SPDR SP 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 SPASX with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and SPDR SP.
Diversification Opportunities for SPDR SPASX and SPDR SP
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and SPDR is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 50 and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and SPDR SPASX 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 SPASX 50 are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR SPASX and SPDR SP
Assuming the 90 days trading horizon SPDR SPASX is expected to generate 7.58 times less return on investment than SPDR SP. But when comparing it to its historical volatility, SPDR SPASX 50 is 1.25 times less risky than SPDR SP. It trades about 0.05 of its potential returns per unit of risk. SPDR SP 500 is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 82,375 in SPDR SP 500 on August 29, 2024 and sell it today you would earn a total of 9,755 from holding SPDR SP 500 or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 50 vs. SPDR SP 500
Performance |
| Timeline |
| SPDR SPASX 50 |
| SPDR SP 500 |
SPDR SPASX and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and SPDR SP
The main advantage of trading using opposite SPDR SPASX and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| SPDR SPASX vs. SPDR SP 500 | SPDR SPASX vs. Vanguard Total Market | SPDR SPASX vs. iShares Core SP | SPDR SPASX vs. iShares Core SP |
| SPDR SP vs. SPDR SPASX 200 | SPDR SP vs. SPDR SPASX 50 | SPDR SP vs. SPDR MSCI World | SPDR SP vs. SPDR Dow Jones |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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