Correlation Between SPDR SP and Madison ETFs
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Madison 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 Madison 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 Madison ETFs Trust, you can compare the effects of market volatilities on SPDR SP and Madison 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 Madison ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Madison ETFs.
Diversification Opportunities for SPDR SP and Madison ETFs
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Madison is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Madison ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison ETFs Trust 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 Madison ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison ETFs Trust has no effect on the direction of SPDR SP i.e., SPDR SP and Madison ETFs go up and down completely randomly.
Pair Corralation between SPDR SP and Madison ETFs
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 1.75 times more return on investment than Madison ETFs. However, SPDR SP is 1.75 times more volatile than Madison ETFs Trust. It trades about 0.14 of its potential returns per unit of risk. Madison ETFs Trust is currently generating about 0.11 per unit of risk. If you would invest 52,449 in SPDR SP 500 on September 1, 2024 and sell it today you would earn a total of 7,806 from holding SPDR SP 500 or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR SP 500 vs. Madison ETFs Trust
Performance |
| Timeline |
| SPDR SP 500 |
| Madison ETFs Trust |
SPDR SP and Madison ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Madison ETFs
The main advantage of trading using opposite SPDR SP and Madison ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Madison 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 Madison ETFs will offset losses from the drop in Madison ETFs' long position.| SPDR SP vs. Vanguard Total Stock | SPDR SP vs. Vanguard FTSE Emerging | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class |
| Madison ETFs vs. Vanguard Total Stock | Madison ETFs vs. SPDR SP 500 | Madison ETFs vs. iShares Core SP | Madison ETFs vs. Vanguard Dividend Appreciation |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |