Correlation Between SPDR Kensho and Global X
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho Intelligent and Global X Infrastructure, you can compare the effects of market volatilities on SPDR Kensho and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and Global X.
Diversification Opportunities for SPDR Kensho and Global X
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Global is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho Intelligent and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure 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 Intelligent are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Infrastructure has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and Global X go up and down completely randomly.
Pair Corralation between SPDR Kensho and Global X
Given the investment horizon of 90 days SPDR Kensho Intelligent is expected to generate 1.01 times more return on investment than Global X. However, SPDR Kensho is 1.01 times more volatile than Global X Infrastructure. It trades about 0.14 of its potential returns per unit of risk. Global X Infrastructure is currently generating about -0.21 per unit of risk. If you would invest 3,661 in SPDR Kensho Intelligent on September 12, 2024 and sell it today you would earn a total of 93.00 from holding SPDR Kensho Intelligent or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho Intelligent vs. Global X Infrastructure
Performance |
| Timeline |
| SPDR Kensho Intelligent |
| Global X Infrastructure |
SPDR Kensho and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and Global X
The main advantage of trading using opposite SPDR Kensho and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| SPDR Kensho vs. Global X Infrastructure | SPDR Kensho vs. iShares Global Infrastructure | SPDR Kensho vs. FlexShares STOXX Global | SPDR Kensho vs. iShares Infrastructure ETF |
| Global X vs. iShares Infrastructure ETF | Global X vs. Global X Cloud | Global X vs. Global X Cybersecurity | Global X vs. Invesco Dynamic Leisure |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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