Correlation Between SPDR SP and Listed Funds
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Listed Funds 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 Listed Funds 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 Listed Funds Trust, you can compare the effects of market volatilities on SPDR SP and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Listed Funds.
Diversification Opportunities for SPDR SP and Listed Funds
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Listed is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Oil and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of SPDR SP i.e., SPDR SP and Listed Funds go up and down completely randomly.
Pair Corralation between SPDR SP and Listed Funds
Considering the 90-day investment horizon SPDR SP Oil is expected to under-perform the Listed Funds. In addition to that, SPDR SP is 1.34 times more volatile than Listed Funds Trust. It trades about -0.06 of its total potential returns per unit of risk. Listed Funds Trust is currently generating about 0.0 per unit of volatility. If you would invest 2,732 in Listed Funds Trust on January 11, 2025 and sell it today you would lose (101.00) from holding Listed Funds Trust or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Oil vs. Listed Funds Trust
Performance |
| Timeline |
| SPDR SP Oil |
| Listed Funds Trust |
SPDR SP and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Listed Funds
The main advantage of trading using opposite SPDR SP and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| SPDR SP vs. VanEck Oil Services | SPDR SP vs. SPDR SP Metals | SPDR SP vs. Energy Select Sector | SPDR SP vs. SPDR SP Retail |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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