Correlation Between SPDR Portfolio and Return Stacked
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and Return Stacked 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 Return Stacked 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 Return Stacked Bonds, you can compare the effects of market volatilities on SPDR Portfolio and Return Stacked 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 Return Stacked. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Return Stacked.
Diversification Opportunities for SPDR Portfolio and Return Stacked
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Return is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Corporate and Return Stacked Bonds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Return Stacked Bonds 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 Return Stacked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Return Stacked Bonds has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Return Stacked go up and down completely randomly.
Pair Corralation between SPDR Portfolio and Return Stacked
Given the investment horizon of 90 days SPDR Portfolio Corporate is expected to generate 0.79 times more return on investment than Return Stacked. However, SPDR Portfolio Corporate is 1.26 times less risky than Return Stacked. It trades about 0.06 of its potential returns per unit of risk. Return Stacked Bonds is currently generating about -0.17 per unit of risk. If you would invest 2,610 in SPDR Portfolio Corporate on September 13, 2024 and sell it today you would earn a total of 323.00 from holding SPDR Portfolio Corporate or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 16.19% |
| Values | Daily Returns |
SPDR Portfolio Corporate vs. Return Stacked Bonds
Performance |
| Timeline |
| SPDR Portfolio Corporate |
| Return Stacked Bonds |
SPDR Portfolio and Return Stacked Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and Return Stacked
The main advantage of trading using opposite SPDR Portfolio and Return Stacked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, Return Stacked 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 Return Stacked will offset losses from the drop in Return Stacked's long position.| SPDR Portfolio vs. American Century STOXX | SPDR Portfolio vs. Franklin Liberty Investment | SPDR Portfolio vs. Aquagold International | SPDR Portfolio vs. Morningstar Unconstrained Allocation |
| Return Stacked vs. SPDR Bloomberg Barclays | Return Stacked vs. SPDR SSGA Fixed | Return Stacked vs. SPDR DoubleLine Short | Return Stacked vs. SPDR Portfolio Corporate |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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