Correlation Between SPDR SP and Day HaganNed
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Day HaganNed 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 Day HaganNed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP World and Day HaganNed Davis, you can compare the effects of market volatilities on SPDR SP and Day HaganNed 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 Day HaganNed. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Day HaganNed.
Diversification Opportunities for SPDR SP and Day HaganNed
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Day is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP World and Day HaganNed Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day HaganNed Davis 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 World are associated (or correlated) with Day HaganNed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day HaganNed Davis has no effect on the direction of SPDR SP i.e., SPDR SP and Day HaganNed go up and down completely randomly.
Pair Corralation between SPDR SP and Day HaganNed
Given the investment horizon of 90 days SPDR SP World is expected to generate 0.91 times more return on investment than Day HaganNed. However, SPDR SP World is 1.09 times less risky than Day HaganNed. It trades about -0.11 of its potential returns per unit of risk. Day HaganNed Davis is currently generating about -0.12 per unit of risk. If you would invest 3,598 in SPDR SP World on August 26, 2024 and sell it today you would lose (70.00) from holding SPDR SP World or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP World vs. Day HaganNed Davis
Performance |
| Timeline |
| SPDR SP World |
| Day HaganNed Davis |
SPDR SP and Day HaganNed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Day HaganNed
The main advantage of trading using opposite SPDR SP and Day HaganNed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Day HaganNed 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 Day HaganNed will offset losses from the drop in Day HaganNed's long position.| SPDR SP vs. SPDR Portfolio Emerging | SPDR SP vs. SPDR Portfolio SP | SPDR SP vs. SPDR Portfolio SP | SPDR SP vs. SPDR Russell Small |
| Day HaganNed vs. Dimensional Core Equity | Day HaganNed vs. Dimensional Emerging Core | Day HaganNed vs. Dimensional Targeted Value | Day HaganNed vs. Dimensional Small Cap |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |