Correlation Between NYSE Composite and SPDR Russell
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SPDR 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 NYSE Composite and SPDR Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SPDR Russell Small, you can compare the effects of market volatilities on NYSE Composite and SPDR 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 NYSE Composite with a short position of SPDR Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SPDR Russell.
Diversification Opportunities for NYSE Composite and SPDR Russell
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and SPDR is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SPDR Russell Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Russell Small and NYSE Composite 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 NYSE Composite are associated (or correlated) with SPDR Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Russell Small has no effect on the direction of NYSE Composite i.e., NYSE Composite and SPDR Russell go up and down completely randomly.
Pair Corralation between NYSE Composite and SPDR Russell
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.73 times more return on investment than SPDR Russell. However, NYSE Composite is 1.38 times less risky than SPDR Russell. It trades about 0.04 of its potential returns per unit of risk. SPDR Russell Small is currently generating about 0.02 per unit of risk. If you would invest 1,760,743 in NYSE Composite on January 30, 2024 and sell it today you would earn a total of 15,584 from holding NYSE Composite or generate 0.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. SPDR Russell Small
Performance |
Timeline |
NYSE Composite and SPDR Russell Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SPDR Russell Small
Pair trading matchups for SPDR Russell
Pair Trading with NYSE Composite and SPDR Russell
The main advantage of trading using opposite NYSE Composite and SPDR Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SPDR 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 SPDR Russell will offset losses from the drop in SPDR Russell's long position.NYSE Composite vs. American Eagle Outfitters | NYSE Composite vs. Royal Bank of | NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Newpark Resources |
SPDR Russell vs. ProShares Russell 2000 | SPDR Russell vs. ProShares MSCI EAFE | SPDR Russell vs. ProShares MSCI Emerging | SPDR Russell vs. ProShares MSCI Europe |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |