Correlation Between SPDR SP and VanEck Oil
Can any of the company-specific risk be diversified away by investing in both SPDR SP and VanEck Oil 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 VanEck Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Oil and VanEck Oil Services, you can compare the effects of market volatilities on SPDR SP and VanEck Oil 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 VanEck Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and VanEck Oil.
Diversification Opportunities for SPDR SP and VanEck Oil
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and VanEck is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Oil and VanEck Oil Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Oil Services 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 Oil are associated (or correlated) with VanEck Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Oil Services has no effect on the direction of SPDR SP i.e., SPDR SP and VanEck Oil go up and down completely randomly.
Pair Corralation between SPDR SP and VanEck Oil
Considering the 90-day investment horizon SPDR SP Oil is expected to generate 1.08 times more return on investment than VanEck Oil. However, SPDR SP is 1.08 times more volatile than VanEck Oil Services. It trades about 0.03 of its potential returns per unit of risk. VanEck Oil Services is currently generating about 0.02 per unit of risk. If you would invest 7,408 in SPDR SP Oil on August 24, 2024 and sell it today you would earn a total of 1,312 from holding SPDR SP Oil or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Oil vs. VanEck Oil Services
Performance |
| Timeline |
| SPDR SP Oil |
| VanEck Oil Services |
SPDR SP and VanEck Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and VanEck Oil
The main advantage of trading using opposite SPDR SP and VanEck Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, VanEck Oil 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 VanEck Oil will offset losses from the drop in VanEck Oil's long position.| SPDR SP vs. iShares Oil Equipment | SPDR SP vs. Invesco Dynamic Oil | SPDR SP vs. SPDR SP Oil | SPDR SP vs. iShares Oil Gas |
| VanEck Oil vs. SPDR SP Oil | VanEck Oil vs. Energy Select Sector | VanEck Oil vs. VanEck Semiconductor ETF | VanEck Oil vs. Materials Select Sector |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| CEOs Directory Screen CEOs from public companies around the world |