Correlation Between SPDR Portfolio and ACGR
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and ACGR 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 Portfolio and ACGR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio SP and ACGR, you can compare the effects of market volatilities on SPDR Portfolio and ACGR 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 Portfolio with a short position of ACGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and ACGR.
Diversification Opportunities for SPDR Portfolio and ACGR
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and ACGR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and ACGR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACGR and SPDR Portfolio 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 Portfolio SP are associated (or correlated) with ACGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACGR has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and ACGR go up and down completely randomly.
Pair Corralation between SPDR Portfolio and ACGR
Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 1.06 times more return on investment than ACGR. However, SPDR Portfolio is 1.06 times more volatile than ACGR. It trades about 0.05 of its potential returns per unit of risk. ACGR is currently generating about -0.01 per unit of risk. If you would invest 9,112 in SPDR Portfolio SP on October 25, 2024 and sell it today you would earn a total of 80.00 from holding SPDR Portfolio SP or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio SP vs. ACGR
Performance |
| Timeline |
| SPDR Portfolio SP |
| ACGR |
SPDR Portfolio and ACGR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and ACGR
The main advantage of trading using opposite SPDR Portfolio and ACGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, ACGR 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 ACGR will offset losses from the drop in ACGR's long position.| SPDR Portfolio vs. FT Vest Equity | SPDR Portfolio vs. Northern Lights | SPDR Portfolio vs. Dimensional International High | SPDR Portfolio vs. First Trust Exchange Traded |
| ACGR vs. FT Vest Equity | ACGR vs. Northern Lights | ACGR vs. Dimensional International High | ACGR vs. First Trust Exchange Traded |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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