Correlation Between SPDR SP and Acquirers
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Acquirers 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 Acquirers 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 The Acquirers, you can compare the effects of market volatilities on SPDR SP and Acquirers 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 Acquirers. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Acquirers.
Diversification Opportunities for SPDR SP and Acquirers
Almost no diversification
The 3 months correlation between SPDR and Acquirers is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Dividend and The Acquirers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acquirers 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 Acquirers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acquirers has no effect on the direction of SPDR SP i.e., SPDR SP and Acquirers go up and down completely randomly.
Pair Corralation between SPDR SP and Acquirers
Considering the 90-day investment horizon SPDR SP Dividend is expected to generate 0.61 times more return on investment than Acquirers. However, SPDR SP Dividend is 1.64 times less risky than Acquirers. It trades about -0.03 of its potential returns per unit of risk. The Acquirers is currently generating about -0.05 per unit of risk. If you would invest 12,925 in SPDR SP Dividend on February 6, 2024 and sell it today you would lose (65.00) from holding SPDR SP Dividend or give up 0.5% 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. The Acquirers
Performance |
Timeline |
SPDR SP Dividend |
Acquirers |
SPDR SP and Acquirers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR SP and Acquirers
The main advantage of trading using opposite SPDR SP and Acquirers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Acquirers 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 Acquirers will offset losses from the drop in Acquirers' long position.SPDR SP vs. Global X SuperDividend | SPDR SP vs. Invesco KBW High | SPDR SP vs. Global X SuperDividend | SPDR SP vs. WisdomTree High Dividend |
Acquirers vs. Global X SuperDividend | Acquirers vs. Invesco KBW High | Acquirers vs. Global X SuperDividend | Acquirers vs. WisdomTree High Dividend |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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