Correlation Between SPDR FTSE and Freedom Day
Can any of the company-specific risk be diversified away by investing in both SPDR FTSE and Freedom Day 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 FTSE and Freedom Day into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR FTSE International and Freedom Day Dividend, you can compare the effects of market volatilities on SPDR FTSE and Freedom Day 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 FTSE with a short position of Freedom Day. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR FTSE and Freedom Day.
Diversification Opportunities for SPDR FTSE and Freedom Day
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Freedom is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FTSE International and Freedom Day Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Day Dividend and SPDR FTSE 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 FTSE International are associated (or correlated) with Freedom Day. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Day Dividend has no effect on the direction of SPDR FTSE i.e., SPDR FTSE and Freedom Day go up and down completely randomly.
Pair Corralation between SPDR FTSE and Freedom Day
Considering the 90-day investment horizon SPDR FTSE International is expected to under-perform the Freedom Day. But the etf apears to be less risky and, when comparing its historical volatility, SPDR FTSE International is 1.39 times less risky than Freedom Day. The etf trades about -0.13 of its potential returns per unit of risk. The Freedom Day Dividend is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,364 in Freedom Day Dividend on August 28, 2024 and sell it today you would earn a total of 159.00 from holding Freedom Day Dividend or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR FTSE International vs. Freedom Day Dividend
Performance |
| Timeline |
| SPDR FTSE International |
| Freedom Day Dividend |
SPDR FTSE and Freedom Day Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR FTSE and Freedom Day
The main advantage of trading using opposite SPDR FTSE and Freedom Day positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR FTSE position performs unexpectedly, Freedom Day 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 Freedom Day will offset losses from the drop in Freedom Day's long position.| SPDR FTSE vs. Vanguard Emerging Markets | SPDR FTSE vs. VanEck China Bond | SPDR FTSE vs. FT Vest Equity | SPDR FTSE vs. Zillow Group Class |
| Freedom Day vs. BlackRock ETF Trust | Freedom Day vs. Rbb Fund | Freedom Day vs. Virtus ETF Trust | Freedom Day vs. Amplify CWP Enhanced |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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