Correlation Between SPDR Kensho and Vanguard Russell
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and Vanguard Russell 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 Kensho and Vanguard Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho Future and Vanguard Russell 2000, you can compare the effects of market volatilities on SPDR Kensho and Vanguard Russell 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 Kensho with a short position of Vanguard Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and Vanguard Russell.
Diversification Opportunities for SPDR Kensho and Vanguard Russell
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Vanguard is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho Future and Vanguard Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Russell 2000 and SPDR Kensho 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 Kensho Future are associated (or correlated) with Vanguard Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Russell 2000 has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and Vanguard Russell go up and down completely randomly.
Pair Corralation between SPDR Kensho and Vanguard Russell
Given the investment horizon of 90 days SPDR Kensho Future is expected to generate 0.96 times more return on investment than Vanguard Russell. However, SPDR Kensho Future is 1.04 times less risky than Vanguard Russell. It trades about 0.14 of its potential returns per unit of risk. Vanguard Russell 2000 is currently generating about 0.08 per unit of risk. If you would invest 5,900 in SPDR Kensho Future on November 2, 2024 and sell it today you would earn a total of 1,071 from holding SPDR Kensho Future or generate 18.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho Future vs. Vanguard Russell 2000
Performance |
| Timeline |
| SPDR Kensho Future |
| Vanguard Russell 2000 |
SPDR Kensho and Vanguard Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and Vanguard Russell
The main advantage of trading using opposite SPDR Kensho and Vanguard Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, Vanguard Russell 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 Vanguard Russell will offset losses from the drop in Vanguard Russell's long position.| SPDR Kensho vs. SPDR STOXX Europe | SPDR Kensho vs. SPDR Bloomberg Barclays | SPDR Kensho vs. SPDR Kensho Intelligent | SPDR Kensho vs. SPDR SP Kensho |
| Vanguard Russell vs. Vanguard Russell 2000 | Vanguard Russell vs. Vanguard SP Small Cap | Vanguard Russell vs. Vanguard Russell 3000 | Vanguard Russell vs. Vanguard Russell 1000 |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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