Correlation Between Day HaganNed and SPKY
Can any of the company-specific risk be diversified away by investing in both Day HaganNed and SPKY 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 Day HaganNed and SPKY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Day HaganNed Davis and SPKY, you can compare the effects of market volatilities on Day HaganNed and SPKY 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 Day HaganNed with a short position of SPKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Day HaganNed and SPKY.
Diversification Opportunities for Day HaganNed and SPKY
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Day and SPKY is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Day HaganNed Davis and SPKY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPKY and Day HaganNed 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 Day HaganNed Davis are associated (or correlated) with SPKY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPKY has no effect on the direction of Day HaganNed i.e., Day HaganNed and SPKY go up and down completely randomly.
Pair Corralation between Day HaganNed and SPKY
Given the investment horizon of 90 days Day HaganNed Davis is expected to generate 0.15 times more return on investment than SPKY. However, Day HaganNed Davis is 6.46 times less risky than SPKY. It trades about 0.1 of its potential returns per unit of risk. SPKY is currently generating about -0.17 per unit of risk. If you would invest 3,008 in Day HaganNed Davis on September 14, 2024 and sell it today you would earn a total of 1,353 from holding Day HaganNed Davis or generate 44.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 29.09% |
| Values | Daily Returns |
Day HaganNed Davis vs. SPKY
Performance |
| Timeline |
| Day HaganNed Davis |
| SPKY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Day HaganNed and SPKY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Day HaganNed and SPKY
The main advantage of trading using opposite Day HaganNed and SPKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Day HaganNed position performs unexpectedly, SPKY 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 SPKY will offset losses from the drop in SPKY's long position.| Day HaganNed vs. SPDR SSGA Sector | Day HaganNed vs. Inspire International ESG | Day HaganNed vs. Overlay Shares Large | Day HaganNed vs. Timothy Plan Small |
| SPKY vs. ProShares UltraShort Yen | SPKY vs. ProShares Ultra Telecommunications | SPKY vs. ProShares Ultra Consumer | SPKY vs. ProShares Ultra Consumer |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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