Correlation Between SPDR SP and Palmer Square
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Palmer Square 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 Palmer Square 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 Palmer Square Funds, you can compare the effects of market volatilities on SPDR SP and Palmer Square 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 Palmer Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Palmer Square.
Diversification Opportunities for SPDR SP and Palmer Square
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPDR and Palmer is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Palmer Square Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palmer Square Funds 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 Palmer Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palmer Square Funds has no effect on the direction of SPDR SP i.e., SPDR SP and Palmer Square go up and down completely randomly.
Pair Corralation between SPDR SP and Palmer Square
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 7.24 times more return on investment than Palmer Square. However, SPDR SP is 7.24 times more volatile than Palmer Square Funds. It trades about 0.12 of its potential returns per unit of risk. Palmer Square Funds is currently generating about 0.29 per unit of risk. If you would invest 59,690 in SPDR SP 500 on September 13, 2024 and sell it today you would earn a total of 747.00 from holding SPDR SP 500 or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. Palmer Square Funds
Performance |
| Timeline |
| SPDR SP 500 |
| Palmer Square Funds |
SPDR SP and Palmer Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Palmer Square
The main advantage of trading using opposite SPDR SP and Palmer Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Palmer Square 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 Palmer Square will offset losses from the drop in Palmer Square's 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 |
| Palmer Square vs. VanEck Vectors Moodys | Palmer Square vs. BondBloxx ETF Trust | Palmer Square vs. Vanguard ESG Corporate | Palmer Square vs. Vanguard Intermediate Term Corporate |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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