Correlation Between SPDR SP and ProShares Big
Can any of the company-specific risk be diversified away by investing in both SPDR SP and ProShares Big 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 ProShares Big into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Health and ProShares Big Data, you can compare the effects of market volatilities on SPDR SP and ProShares Big 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 ProShares Big. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and ProShares Big.
Diversification Opportunities for SPDR SP and ProShares Big
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and ProShares is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Health and ProShares Big Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Big Data 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 Health are associated (or correlated) with ProShares Big. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Big Data has no effect on the direction of SPDR SP i.e., SPDR SP and ProShares Big go up and down completely randomly.
Pair Corralation between SPDR SP and ProShares Big
Considering the 90-day investment horizon SPDR SP is expected to generate 16.36 times less return on investment than ProShares Big. But when comparing it to its historical volatility, SPDR SP Health is 1.03 times less risky than ProShares Big. It trades about 0.04 of its potential returns per unit of risk. ProShares Big Data is currently generating about 0.62 of returns per unit of risk over similar time horizon. If you would invest 3,612 in ProShares Big Data on August 24, 2024 and sell it today you would earn a total of 819.00 from holding ProShares Big Data or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Health vs. ProShares Big Data
Performance |
| Timeline |
| SPDR SP Health |
| ProShares Big Data |
SPDR SP and ProShares Big Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and ProShares Big
The main advantage of trading using opposite SPDR SP and ProShares Big positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, ProShares Big 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 ProShares Big will offset losses from the drop in ProShares Big's long position.| SPDR SP vs. Global X E commerce | SPDR SP vs. Global X Genomics | SPDR SP vs. Global X Cloud | SPDR SP vs. Global X FinTech |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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