Correlation Between Abrdn Physical and SPDR Portfolio

Can any of the company-specific risk be diversified away by investing in both Abrdn Physical and SPDR Portfolio 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 Abrdn Physical and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between abrdn Physical Palladium and SPDR Portfolio SP, you can compare the effects of market volatilities on Abrdn Physical and SPDR Portfolio 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 Abrdn Physical with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Physical and SPDR Portfolio.

Diversification Opportunities for Abrdn Physical and SPDR Portfolio

0.51

Correlation Coefficient

Abrdn Physical  SPDR Portfolio

Very weak diversification

The 3 months correlation between Abrdn and SPDR is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Palladium and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP and Abrdn Physical 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 abrdn Physical Palladium are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and SPDR Portfolio go up and down completely randomly.

Pair Corralation between Abrdn Physical and SPDR Portfolio

Given the investment horizon of 90 days abrdn Physical Palladium is expected to generate 1.86 times more return on investment than SPDR Portfolio. However, Abrdn Physical is 1.86 times more volatile than SPDR Portfolio SP. It trades about 0.21 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.18 per unit of risk. If you would invest  8,600  in abrdn Physical Palladium on April 30, 2025 and sell it today you would earn a total of  2,647  from holding abrdn Physical Palladium or generate 30.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

abrdn Physical Palladium  vs.  SPDR Portfolio SP

abrdn Physical Palladium

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Physical Palladium are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Abrdn Physical disclosed solid returns over the last few months and may actually be approaching a breakup point.

SPDR Portfolio SP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio SP are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, SPDR Portfolio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abrdn Physical and SPDR Portfolio

The main advantage of trading using opposite Abrdn Physical and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Physical position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.

The idea behind abrdn Physical Palladium and SPDR Portfolio SP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.