Correlation Between SPDR Portfolio and FundX ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and FundX ETF 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 FundX ETF 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 FundX ETF, you can compare the effects of market volatilities on SPDR Portfolio and FundX ETF 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 FundX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and FundX ETF.
Diversification Opportunities for SPDR Portfolio and FundX ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and FundX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and FundX ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX ETF 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 FundX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX ETF has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and FundX ETF go up and down completely randomly.
Pair Corralation between SPDR Portfolio and FundX ETF
Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 1.05 times more return on investment than FundX ETF. However, SPDR Portfolio is 1.05 times more volatile than FundX ETF. It trades about 0.18 of its potential returns per unit of risk. FundX ETF is currently generating about 0.17 per unit of risk. If you would invest 8,750 in SPDR Portfolio SP on September 13, 2024 and sell it today you would earn a total of 272.00 from holding SPDR Portfolio SP or generate 3.11% 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. FundX ETF
Performance |
| Timeline |
| SPDR Portfolio SP |
| FundX ETF |
SPDR Portfolio and FundX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and FundX ETF
The main advantage of trading using opposite SPDR Portfolio and FundX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, FundX ETF 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 FundX ETF will offset losses from the drop in FundX ETF's long position.| SPDR Portfolio vs. FT Vest Equity | SPDR Portfolio vs. Northern Lights | SPDR Portfolio vs. Dimensional International High | SPDR Portfolio vs. JPMorgan Fundamental Data |
| FundX ETF vs. Freedom Day Dividend | FundX ETF vs. Franklin Templeton ETF | FundX ETF vs. iShares MSCI China | FundX ETF vs. Tidal Trust II |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |