Correlation Between SPDR FactSet and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR FactSet 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 SPDR FactSet and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR FactSet Innovative and SPDR SP Health, you can compare the effects of market volatilities on SPDR FactSet 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 SPDR FactSet with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR FactSet and SPDR SP.
Diversification Opportunities for SPDR FactSet and SPDR SP
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and SPDR is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FactSet Innovative and SPDR SP Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Health and SPDR FactSet 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 FactSet Innovative 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 Health has no effect on the direction of SPDR FactSet i.e., SPDR FactSet and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR FactSet and SPDR SP
Given the investment horizon of 90 days SPDR FactSet Innovative is expected to generate 1.14 times more return on investment than SPDR SP. However, SPDR FactSet is 1.14 times more volatile than SPDR SP Health. It trades about 0.3 of its potential returns per unit of risk. SPDR SP Health is currently generating about 0.08 per unit of risk. If you would invest 16,097 in SPDR FactSet Innovative on August 30, 2024 and sell it today you would earn a total of 1,934 from holding SPDR FactSet Innovative or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR FactSet Innovative vs. SPDR SP Health
Performance |
| Timeline |
| SPDR FactSet Innovative |
| SPDR SP Health |
SPDR FactSet and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR FactSet and SPDR SP
The main advantage of trading using opposite SPDR FactSet and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR FactSet 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.| SPDR FactSet vs. SPDR SP Software | SPDR FactSet vs. SPDR Morgan Stanley | SPDR FactSet vs. SPDR SP Health |
| SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Software | SPDR SP vs. SPDR SP Telecom | SPDR SP vs. SPDR SP Pharmaceuticals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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