Correlation Between SPDR SP and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both SPDR SP and SPDR Kensho 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 SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Kensho and SPDR Kensho New, you can compare the effects of market volatilities on SPDR SP and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and SPDR Kensho.
Diversification Opportunities for SPDR SP and SPDR Kensho
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and SPDR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Kensho and SPDR Kensho New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho New 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 Kensho are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho New has no effect on the direction of SPDR SP i.e., SPDR SP and SPDR Kensho go up and down completely randomly.
Pair Corralation between SPDR SP and SPDR Kensho
Given the investment horizon of 90 days SPDR SP is expected to generate 1.78 times less return on investment than SPDR Kensho. But when comparing it to its historical volatility, SPDR SP Kensho is 1.37 times less risky than SPDR Kensho. It trades about 0.16 of its potential returns per unit of risk. SPDR Kensho New is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,934 in SPDR Kensho New on August 24, 2024 and sell it today you would earn a total of 329.00 from holding SPDR Kensho New or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Kensho vs. SPDR Kensho New
Performance |
| Timeline |
| SPDR SP Kensho |
| SPDR Kensho New |
SPDR SP and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and SPDR Kensho
The main advantage of trading using opposite SPDR SP and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, SPDR Kensho 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 Kensho will offset losses from the drop in SPDR Kensho's long position.| SPDR SP vs. iShares Infrastructure ETF | SPDR SP vs. Global X Cloud | SPDR SP vs. Global X Cybersecurity | SPDR SP vs. Invesco Dynamic Leisure |
| SPDR Kensho vs. First Trust Small | SPDR Kensho vs. First Trust Mid | SPDR Kensho vs. First Trust Small | SPDR Kensho vs. First Trust Multi |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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