Correlation Between SPDR SP and RBC Short
Can any of the company-specific risk be diversified away by investing in both SPDR SP and RBC Short 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 SP and RBC Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Aerospace and RBC Short Term, you can compare the effects of market volatilities on SPDR SP and RBC Short 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 SP with a short position of RBC Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and RBC Short.
Diversification Opportunities for SPDR SP and RBC Short
Very good diversification
The 3 months correlation between SPDR and RBC is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Aerospace and RBC Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Short Term and SPDR SP 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 SP Aerospace are associated (or correlated) with RBC Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Short Term has no effect on the direction of SPDR SP i.e., SPDR SP and RBC Short go up and down completely randomly.
Pair Corralation between SPDR SP and RBC Short
Considering the 90-day investment horizon SPDR SP Aerospace is expected to generate 3.05 times more return on investment than RBC Short. However, SPDR SP is 3.05 times more volatile than RBC Short Term. It trades about 0.12 of its potential returns per unit of risk. RBC Short Term is currently generating about -0.05 per unit of risk. If you would invest 24,185 in SPDR SP Aerospace on November 4, 2025 and sell it today you would earn a total of 3,111 from holding SPDR SP Aerospace or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
SPDR SP Aerospace vs. RBC Short Term
Performance |
| Timeline |
| SPDR SP Aerospace |
| RBC Short Term |
SPDR SP and RBC Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and RBC Short
The main advantage of trading using opposite SPDR SP and RBC Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, RBC Short 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 RBC Short will offset losses from the drop in RBC Short's long position.| SPDR SP vs. Fidelity Covington Trust | SPDR SP vs. BNY Mellon Large | SPDR SP vs. Vanguard SP Mid Cap | SPDR SP vs. Invesco SP MidCap |
| RBC Short vs. BMO All Equity ETF | RBC Short vs. TD Active Global | RBC Short vs. First Asset Morningstar | RBC Short vs. Dynamic Active Canadian |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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