Correlation Between SPDR SP and Vanguard High
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Vanguard High 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 Vanguard High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Dividend and Vanguard High Dividend, you can compare the effects of market volatilities on SPDR SP and Vanguard High 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 Vanguard High. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Vanguard High.
Diversification Opportunities for SPDR SP and Vanguard High
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and Vanguard is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Dividend and Vanguard High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard High Dividend 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 Dividend are associated (or correlated) with Vanguard High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard High Dividend has no effect on the direction of SPDR SP i.e., SPDR SP and Vanguard High go up and down completely randomly.
Pair Corralation between SPDR SP and Vanguard High
Considering the 90-day investment horizon SPDR SP Dividend is expected to generate 1.08 times more return on investment than Vanguard High. However, SPDR SP is 1.08 times more volatile than Vanguard High Dividend. It trades about 0.0 of its potential returns per unit of risk. Vanguard High Dividend is currently generating about -0.05 per unit of risk. If you would invest 12,852 in SPDR SP Dividend on January 25, 2024 and sell it today you would lose (7.00) from holding SPDR SP Dividend or give up 0.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Dividend vs. Vanguard High Dividend
Performance |
| Timeline |
| SPDR SP Dividend |
| Vanguard High Dividend |
SPDR SP and Vanguard High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Vanguard High
The main advantage of trading using opposite SPDR SP and Vanguard High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Vanguard High 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 High will offset losses from the drop in Vanguard High's long position.| SPDR SP vs. SPDR Russell 1000 | SPDR SP vs. SPDR MSCI USA | SPDR SP vs. SPDR MSCI EAFE | SPDR SP vs. SPDR SSGA Large |
| Vanguard High vs. Hartford Multifactor Emerging | Vanguard High vs. Hartford Multifactor Developed | Vanguard High vs. iShares Equity Factor | Vanguard High vs. SPDR MSCI USA |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |