Correlation Between SPDR SP and Abrdn ETFs
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Abrdn ETFs 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 Abrdn ETFs 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 abrdn ETFs , you can compare the effects of market volatilities on SPDR SP and Abrdn ETFs 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 Abrdn ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Abrdn ETFs.
Diversification Opportunities for SPDR SP and Abrdn ETFs
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Abrdn is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and abrdn ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn ETFs 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 Abrdn ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn ETFs has no effect on the direction of SPDR SP i.e., SPDR SP and Abrdn ETFs go up and down completely randomly.
Pair Corralation between SPDR SP and Abrdn ETFs
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 0.73 times more return on investment than Abrdn ETFs. However, SPDR SP 500 is 1.37 times less risky than Abrdn ETFs. It trades about 0.07 of its potential returns per unit of risk. abrdn ETFs is currently generating about 0.03 per unit of risk. If you would invest 56,007 in SPDR SP 500 on November 28, 2024 and sell it today you would earn a total of 3,417 from holding SPDR SP 500 or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. abrdn ETFs
Performance |
| Timeline |
| SPDR SP 500 |
| abrdn ETFs |
SPDR SP and Abrdn ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Abrdn ETFs
The main advantage of trading using opposite SPDR SP and Abrdn ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Abrdn ETFs 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 Abrdn ETFs will offset losses from the drop in Abrdn ETFs' long position.| SPDR SP vs. Vanguard SP 500 | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class | SPDR SP vs. Northern Lights |
| Abrdn ETFs vs. abrdn Bloomberg All | Abrdn ETFs vs. abrdn Bloomberg All | Abrdn ETFs vs. iShares Commodity Curve | Abrdn ETFs vs. iShares Bloomberg Roll |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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