Correlation Between Via Renewables and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Via Renewables and SPDR SP 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 Via Renewables and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and SPDR SP 500, you can compare the effects of market volatilities on Via Renewables and SPDR SP 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 Via Renewables with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and SPDR SP.
Diversification Opportunities for Via Renewables and SPDR SP
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Via and SPDR is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and Via Renewables 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 Via Renewables are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of Via Renewables i.e., Via Renewables and SPDR SP go up and down completely randomly.
Pair Corralation between Via Renewables and SPDR SP
Assuming the 90 days horizon Via Renewables is expected to generate 1.03 times less return on investment than SPDR SP. In addition to that, Via Renewables is 1.31 times more volatile than SPDR SP 500. It trades about 0.25 of its total potential returns per unit of risk. SPDR SP 500 is currently generating about 0.33 per unit of volatility. If you would invest 4,659 in SPDR SP 500 on September 1, 2024 and sell it today you would earn a total of 250.00 from holding SPDR SP 500 or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Via Renewables vs. SPDR SP 500
Performance |
| Timeline |
| Via Renewables |
| SPDR SP 500 |
Via Renewables and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Renewables and SPDR SP
The main advantage of trading using opposite Via Renewables and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Via Renewables vs. Centrais Eltricas Brasileiras | Via Renewables vs. Nextera Energy | Via Renewables vs. Consumers Energy | Via Renewables vs. CMS Energy |
| SPDR SP vs. Vanguard Total Stock | SPDR SP vs. SPDR SP 500 | SPDR SP vs. iShares Core SP | SPDR SP vs. Vanguard Dividend Appreciation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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