Correlation Between SPDR Portfolio and ProShares Inflation
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and ProShares Inflation 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 Portfolio and ProShares Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Corporate and ProShares Inflation Expectations, you can compare the effects of market volatilities on SPDR Portfolio and ProShares Inflation 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 Portfolio with a short position of ProShares Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and ProShares Inflation.
Diversification Opportunities for SPDR Portfolio and ProShares Inflation
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and ProShares is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Corporate and ProShares Inflation Expectatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Inflation and SPDR Portfolio 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 Portfolio Corporate are associated (or correlated) with ProShares Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Inflation has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and ProShares Inflation go up and down completely randomly.
Pair Corralation between SPDR Portfolio and ProShares Inflation
Given the investment horizon of 90 days SPDR Portfolio Corporate is expected to under-perform the ProShares Inflation. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Portfolio Corporate is 1.09 times less risky than ProShares Inflation. The etf trades about -0.02 of its potential returns per unit of risk. The ProShares Inflation Expectations is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,286 in ProShares Inflation Expectations on October 22, 2024 and sell it today you would earn a total of 31.00 from holding ProShares Inflation Expectations or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Corporate vs. ProShares Inflation Expectatio
Performance |
| Timeline |
| SPDR Portfolio Corporate |
| ProShares Inflation |
SPDR Portfolio and ProShares Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and ProShares Inflation
The main advantage of trading using opposite SPDR Portfolio and ProShares Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, ProShares Inflation 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 ProShares Inflation will offset losses from the drop in ProShares Inflation's long position.| SPDR Portfolio vs. SPDR Barclays Intermediate | SPDR Portfolio vs. SPDR Portfolio Intermediate | SPDR Portfolio vs. SPDR Portfolio Mortgage | SPDR Portfolio vs. SPDR Barclays Long |
| ProShares Inflation vs. SPDR SSgA Multi Asset | ProShares Inflation vs. ProShares Hedge Replication | ProShares Inflation vs. ProShares Short 7 10 | ProShares Inflation vs. ProShares Merger ETF |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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