Correlation Between SPDR SP and Aptus Drawdown
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Aptus Drawdown 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 Aptus Drawdown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Aptus Drawdown Managed, you can compare the effects of market volatilities on SPDR SP and Aptus Drawdown 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 Aptus Drawdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Aptus Drawdown.
Diversification Opportunities for SPDR SP and Aptus Drawdown
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Aptus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Aptus Drawdown Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Drawdown Managed 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 500 are associated (or correlated) with Aptus Drawdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Drawdown Managed has no effect on the direction of SPDR SP i.e., SPDR SP and Aptus Drawdown go up and down completely randomly.
Pair Corralation between SPDR SP and Aptus Drawdown
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 1.01 times more return on investment than Aptus Drawdown. However, SPDR SP is 1.01 times more volatile than Aptus Drawdown Managed. It trades about 0.15 of its potential returns per unit of risk. Aptus Drawdown Managed is currently generating about 0.1 per unit of risk. If you would invest 59,758 in SPDR SP 500 on November 18, 2024 and sell it today you would earn a total of 1,212 from holding SPDR SP 500 or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. Aptus Drawdown Managed
Performance |
| Timeline |
| SPDR SP 500 |
| Aptus Drawdown Managed |
SPDR SP and Aptus Drawdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Aptus Drawdown
The main advantage of trading using opposite SPDR SP and Aptus Drawdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Aptus Drawdown 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 Aptus Drawdown will offset losses from the drop in Aptus Drawdown's long position.| SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class | SPDR SP vs. Northern Lights | SPDR SP vs. VanEck Vectors Moodys |
| Aptus Drawdown vs. Aptus Collared Income | Aptus Drawdown vs. Aptus Defined Risk | Aptus Drawdown vs. Anfield Equity Sector | Aptus Drawdown vs. Opus 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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