Correlation Between Unusual Whales and SPDR SP

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

By analyzing existing cross correlation between Unusual Whales Subversive and SPDR SP 500, you can compare the effects of market volatilities on Unusual Whales and SPDR SP 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 Unusual Whales with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unusual Whales and SPDR SP.

Diversification Opportunities for Unusual Whales and SPDR SP

0.83

Correlation Coefficient

Unusual Whales  SPDR SP

Very poor diversification

The 3 months correlation between Unusual and SPDR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Unusual Whales Subversive and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and Unusual Whales 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 Unusual Whales Subversive are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of Unusual Whales i.e., Unusual Whales and SPDR SP go up and down completely randomly.

Pair Corralation between Unusual Whales and SPDR SP

Given the investment horizon of 90 days Unusual Whales is expected to generate 1.64 times less return on investment than SPDR SP. In addition to that, Unusual Whales is 1.02 times more volatile than SPDR SP 500. It trades about 0.06 of its total potential returns per unit of risk. SPDR SP 500 is currently generating about 0.11 per unit of volatility. If you would invest  40,379  in SPDR SP 500 on September 29, 2024 and sell it today you would earn a total of  19,122  from holding SPDR SP 500 or generate 47.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.79%
Values	Daily Returns

Unusual Whales Subversive  vs.  SPDR SP 500

Unusual Whales Subversive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unusual Whales Subversive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Unusual Whales is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SPDR SP 500

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP 500 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, SPDR SP is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Unusual Whales and SPDR SP

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

The idea behind Unusual Whales Subversive and SPDR SP 500 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.