Correlation Between SPKX and SPKY
Can any of the company-specific risk be diversified away by investing in both SPKX and SPKY 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 SPKX and SPKY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPKX and SPKY, you can compare the effects of market volatilities on SPKX and SPKY 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 SPKX with a short position of SPKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPKX and SPKY.
Diversification Opportunities for SPKX and SPKY
No risk reduction
The 3 months correlation between SPKX and SPKY is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPKX and SPKY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPKY and SPKX 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 SPKX are associated (or correlated) with SPKY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPKY has no effect on the direction of SPKX i.e., SPKX and SPKY go up and down completely randomly.
Pair Corralation between SPKX and SPKY
If you would invest 492.00 in SPKY on September 14, 2024 and sell it today you would earn a total of 0.00 from holding SPKY or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPKX vs. SPKY
Performance |
| Timeline |
| SPKX |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPKY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPKX and SPKY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPKX and SPKY
The main advantage of trading using opposite SPKX and SPKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPKX position performs unexpectedly, SPKY 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 SPKY will offset losses from the drop in SPKY's long position.| SPKX vs. ProShares UltraShort Yen | SPKX vs. ProShares Ultra Telecommunications | SPKX vs. ProShares Ultra Consumer | SPKX vs. ProShares Ultra Consumer |
| SPKY vs. ProShares UltraShort Yen | SPKY vs. ProShares Ultra Telecommunications | SPKY vs. ProShares Ultra Consumer | SPKY vs. ProShares Ultra Consumer |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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