Correlation Between SPDR Kensho and Pinnacle Focused

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

By analyzing existing cross correlation between SPDR Kensho New and Pinnacle Focused Opportunities, you can compare the effects of market volatilities on SPDR Kensho and Pinnacle Focused 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 Kensho with a short position of Pinnacle Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and Pinnacle Focused.

Diversification Opportunities for SPDR Kensho and Pinnacle Focused

0.94

Correlation Coefficient

SPDR Kensho  Pinnacle Focused

Almost no diversification

The 3 months correlation between SPDR and Pinnacle is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and Pinnacle Focused Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Focused Opp and SPDR Kensho 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 Kensho New are associated (or correlated) with Pinnacle Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Focused Opp has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and Pinnacle Focused go up and down completely randomly.

Pair Corralation between SPDR Kensho and Pinnacle Focused

Given the investment horizon of 90 days SPDR Kensho New is expected to generate 0.47 times more return on investment than Pinnacle Focused. However, SPDR Kensho New is 2.14 times less risky than Pinnacle Focused. It trades about -0.05 of its potential returns per unit of risk. Pinnacle Focused Opportunities is currently generating about -0.1 per unit of risk. If you would invest  5,100  in SPDR Kensho New on December 29, 2024 and sell it today you would lose (274.00) from holding SPDR Kensho New or give up 5.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SPDR Kensho New  vs.  Pinnacle Focused Opportunities

SPDR Kensho New

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Kensho New has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, SPDR Kensho is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pinnacle Focused Opp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pinnacle Focused Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with SPDR Kensho and Pinnacle Focused

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

The idea behind SPDR Kensho New and Pinnacle Focused Opportunities 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.