Correlation Between SPDR SP and PowerShares
Can any of the company-specific risk be diversified away by investing in both SPDR SP and PowerShares 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 PowerShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and PowerShares, you can compare the effects of market volatilities on SPDR SP and PowerShares 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 PowerShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and PowerShares.
Diversification Opportunities for SPDR SP and PowerShares
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and PowerShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and PowerShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerShares 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 500 are associated (or correlated) with PowerShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerShares has no effect on the direction of SPDR SP i.e., SPDR SP and PowerShares go up and down completely randomly.
Pair Corralation between SPDR SP and PowerShares
If you would invest 59,553 in SPDR SP 500 on September 26, 2024 and sell it today you would earn a total of 577.00 from holding SPDR SP 500 or generate 0.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
SPDR SP 500 vs. PowerShares
Performance |
Timeline |
SPDR SP 500 |
PowerShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and PowerShares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR SP and PowerShares
The main advantage of trading using opposite SPDR SP and PowerShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, PowerShares 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 PowerShares will offset losses from the drop in PowerShares' long position.SPDR SP vs. Vanguard SP 500 | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class | SPDR SP vs. Northern Lights |
PowerShares vs. Vanguard Total Stock | PowerShares vs. SPDR SP 500 | PowerShares vs. iShares Core SP | PowerShares vs. Vanguard Total Bond |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Money Managers Screen money managers from public funds and ETFs managed around the world |