Correlation Between SPDR SP and RBB Fund
Can any of the company-specific risk be diversified away by investing in both SPDR SP and RBB Fund 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 RBB Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 600 and The RBB Fund, you can compare the effects of market volatilities on SPDR SP and RBB Fund 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 RBB Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and RBB Fund.
Diversification Opportunities for SPDR SP and RBB Fund
Very poor diversification
The 3 months correlation between SPDR and RBB is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 600 and The RBB Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBB Fund 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 600 are associated (or correlated) with RBB Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBB Fund has no effect on the direction of SPDR SP i.e., SPDR SP and RBB Fund go up and down completely randomly.
Pair Corralation between SPDR SP and RBB Fund
Given the investment horizon of 90 days SPDR SP is expected to generate 1.16 times less return on investment than RBB Fund. In addition to that, SPDR SP is 1.03 times more volatile than The RBB Fund. It trades about 0.06 of its total potential returns per unit of risk. The RBB Fund is currently generating about 0.08 per unit of volatility. If you would invest 2,940 in The RBB Fund on August 26, 2024 and sell it today you would earn a total of 920.00 from holding The RBB Fund or generate 31.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 600 vs. The RBB Fund
Performance |
| Timeline |
| SPDR SP 600 |
| RBB Fund |
SPDR SP and RBB Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and RBB Fund
The main advantage of trading using opposite SPDR SP and RBB Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, RBB Fund 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 RBB Fund will offset losses from the drop in RBB Fund's long position.| SPDR SP vs. SPDR SP 600 | SPDR SP vs. SPDR SP 400 | SPDR SP vs. SPDR SP 400 | SPDR SP vs. Invesco SP SmallCap |
| RBB Fund vs. Invesco DWA Momentum | RBB Fund vs. Invesco DWA Developed | RBB Fund vs. Invesco DWA Emerging | RBB Fund vs. First Trust Small |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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