Correlation Between SPDR SP and Impact Shares
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Impact Shares 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 Impact Shares 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 Impact Shares YWCA, you can compare the effects of market volatilities on SPDR SP and Impact Shares 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 Impact Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Impact Shares.
Diversification Opportunities for SPDR SP and Impact Shares
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Impact is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Impact Shares YWCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Shares YWCA 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 Impact Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Shares YWCA has no effect on the direction of SPDR SP i.e., SPDR SP and Impact Shares go up and down completely randomly.
Pair Corralation between SPDR SP and Impact Shares
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 1.06 times more return on investment than Impact Shares. However, SPDR SP is 1.06 times more volatile than Impact Shares YWCA. It trades about 0.13 of its potential returns per unit of risk. Impact Shares YWCA is currently generating about 0.12 per unit of risk. If you would invest 41,837 in SPDR SP 500 on August 27, 2024 and sell it today you would earn a total of 17,714 from holding SPDR SP 500 or generate 42.34% 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. Impact Shares YWCA
Performance |
| Timeline |
| SPDR SP 500 |
| Impact Shares YWCA |
SPDR SP and Impact Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Impact Shares
The main advantage of trading using opposite SPDR SP and Impact Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Impact Shares 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 Impact Shares will offset losses from the drop in Impact Shares' long position.| SPDR SP vs. FT Vest Equity | SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. First Trust Exchange Traded |
| Impact Shares vs. Salon City | Impact Shares vs. Innovator ETFs Trust | Impact Shares vs. Impact Shares NAACP | Impact Shares vs. Searchlight Minerals Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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