Correlation Between 1x Short and SPKY
Can any of the company-specific risk be diversified away by investing in both 1x Short 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 1x Short and SPKY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1x Short VIX and SPKY, you can compare the effects of market volatilities on 1x Short 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 1x Short with a short position of SPKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1x Short and SPKY.
Diversification Opportunities for 1x Short and SPKY
Average diversification
The 3 months correlation between SVIX and SPKY is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding 1x Short VIX and SPKY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPKY and 1x Short 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 1x Short VIX 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 1x Short i.e., 1x Short and SPKY go up and down completely randomly.
Pair Corralation between 1x Short and SPKY
If you would invest 2,600 in 1x Short VIX on November 2, 2024 and sell it today you would earn a total of 28.00 from holding 1x Short VIX or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.96% |
| Values | Daily Returns |
1x Short VIX vs. SPKY
Performance |
| Timeline |
| 1x Short VIX |
| SPKY |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
1x Short and SPKY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1x Short and SPKY
The main advantage of trading using opposite 1x Short and SPKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1x Short 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.| 1x Short vs. 2x Long VIX | 1x Short vs. ProShares VIX Mid Term | 1x Short vs. ProShares Short VIX | 1x Short vs. AXS 2X Innovation |
| SPKY vs. Invesco DB Dollar | SPKY vs. iPath Series B | SPKY vs. ProShares VIX Short Term | SPKY vs. ProShares VIX Mid Term |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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