Correlation Between SPDR Portfolio and Themes Natural
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and Themes Natural 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 Themes Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio SP and Themes Natural Monopoly, you can compare the effects of market volatilities on SPDR Portfolio and Themes Natural 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 Themes Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Themes Natural.
Diversification Opportunities for SPDR Portfolio and Themes Natural
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Themes is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and Themes Natural Monopoly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Natural Monopoly 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 SP are associated (or correlated) with Themes Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Natural Monopoly has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Themes Natural go up and down completely randomly.
Pair Corralation between SPDR Portfolio and Themes Natural
Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 1.22 times more return on investment than Themes Natural. However, SPDR Portfolio is 1.22 times more volatile than Themes Natural Monopoly. It trades about 0.15 of its potential returns per unit of risk. Themes Natural Monopoly is currently generating about 0.17 per unit of risk. If you would invest 6,811 in SPDR Portfolio SP on August 26, 2024 and sell it today you would earn a total of 194.00 from holding SPDR Portfolio SP or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio SP vs. Themes Natural Monopoly
Performance |
| Timeline |
| SPDR Portfolio SP |
| Themes Natural Monopoly |
SPDR Portfolio and Themes Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and Themes Natural
The main advantage of trading using opposite SPDR Portfolio and Themes Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, Themes Natural 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 Themes Natural will offset losses from the drop in Themes Natural's long position.| SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. Invesco NASDAQ 100 | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP |
| Themes Natural vs. Pacer Nasdaq International | Themes Natural vs. Pacer Funds Trust | Themes Natural vs. FT Vest Equity | Themes Natural vs. Zillow Group Class |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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