Correlation Between SPDR Portfolio and SPDR Kensho
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and SPDR Kensho 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 SPDR Kensho into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Mortgage and SPDR Kensho Intelligent, you can compare the effects of market volatilities on SPDR Portfolio and SPDR Kensho 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 SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and SPDR Kensho.
Diversification Opportunities for SPDR Portfolio and SPDR Kensho
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and SPDR is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Mortgage and SPDR Kensho Intelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Intelligent 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 Mortgage are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Intelligent has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and SPDR Kensho go up and down completely randomly.
Pair Corralation between SPDR Portfolio and SPDR Kensho
Given the investment horizon of 90 days SPDR Portfolio is expected to generate 2.63 times less return on investment than SPDR Kensho. But when comparing it to its historical volatility, SPDR Portfolio Mortgage is 3.41 times less risky than SPDR Kensho. It trades about 0.05 of its potential returns per unit of risk. SPDR Kensho Intelligent is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,394 in SPDR Kensho Intelligent on August 27, 2024 and sell it today you would earn a total of 297.00 from holding SPDR Kensho Intelligent or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Mortgage vs. SPDR Kensho Intelligent
Performance |
| Timeline |
| SPDR Portfolio Mortgage |
| SPDR Kensho Intelligent |
SPDR Portfolio and SPDR Kensho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and SPDR Kensho
The main advantage of trading using opposite SPDR Portfolio and SPDR Kensho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, SPDR Kensho 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 SPDR Kensho will offset losses from the drop in SPDR Kensho's long position.| SPDR Portfolio vs. SPDR Portfolio Intermediate | SPDR Portfolio vs. iShares 5 10 Year | SPDR Portfolio vs. SPDR Barclays Long | SPDR Portfolio vs. SPDR Barclays Intermediate |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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