Correlation Between SPDR Portfolio and Unusual Whales

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

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

Diversification Opportunities for SPDR Portfolio and Unusual Whales

0.94

Correlation Coefficient

SPDR Portfolio  Unusual Whales

Almost no diversification

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

Pair Corralation between SPDR Portfolio and Unusual Whales

Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 0.84 times more return on investment than Unusual Whales. However, SPDR Portfolio SP is 1.19 times less risky than Unusual Whales. It trades about 0.13 of its potential returns per unit of risk. Unusual Whales Subversive is currently generating about 0.1 per unit of risk. If you would invest  4,347  in SPDR Portfolio SP on September 26, 2024 and sell it today you would earn a total of  2,747  from holding SPDR Portfolio SP or generate 63.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.56%
Values	Daily Returns

SPDR Portfolio SP  vs.  Unusual Whales Subversive

SPDR Portfolio SP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio SP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, SPDR Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Unusual Whales Subversive

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unusual Whales Subversive are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Unusual Whales is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR Portfolio and Unusual Whales

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

The idea behind SPDR Portfolio SP and Unusual Whales Subversive 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.