Correlation Between SPDR Portfolio and SEI Exchange
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and SEI Exchange 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 SEI Exchange 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 SEI Exchange Traded, you can compare the effects of market volatilities on SPDR Portfolio and SEI Exchange 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 SEI Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and SEI Exchange.
Diversification Opportunities for SPDR Portfolio and SEI Exchange
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SEI is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and SEI Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Exchange Traded 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 SEI Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Exchange Traded has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and SEI Exchange go up and down completely randomly.
Pair Corralation between SPDR Portfolio and SEI Exchange
Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 1.39 times more return on investment than SEI Exchange. However, SPDR Portfolio is 1.39 times more volatile than SEI Exchange Traded. It trades about 0.12 of its potential returns per unit of risk. SEI Exchange Traded is currently generating about 0.09 per unit of risk. If you would invest 4,488 in SPDR Portfolio SP on August 30, 2024 and sell it today you would earn a total of 2,556 from holding SPDR Portfolio SP or generate 56.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio SP vs. SEI Exchange Traded
Performance |
| Timeline |
| SPDR Portfolio SP |
| SEI Exchange Traded |
SPDR Portfolio and SEI Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and SEI Exchange
The main advantage of trading using opposite SPDR Portfolio and SEI Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, SEI Exchange 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 SEI Exchange will offset losses from the drop in SEI Exchange'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 |
| SEI Exchange vs. JPMorgan BetaBuilders International | SEI Exchange vs. JPMorgan Core Plus | SEI Exchange vs. JPMorgan BetaBuilders Canada | SEI Exchange vs. JPMorgan Emerging Markets |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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