Correlation Between SPDR SP and Unusual Whales

Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SP 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 SP 500 and Unusual Whales Subversive, you can compare the effects of market volatilities on SPDR SP 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 SP with a short position of Unusual Whales. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Unusual Whales.

Diversification Opportunities for SPDR SP and Unusual Whales

0.82

Correlation Coefficient

SPDR SP  Unusual Whales

Very poor diversification

The 3 months correlation between SPDR and Unusual is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 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 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 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 SP i.e., SPDR SP and Unusual Whales go up and down completely randomly.

Pair Corralation between SPDR SP and Unusual Whales

Considering the 90-day investment horizon SPDR SP 500 is expected to generate 0.98 times more return on investment than Unusual Whales. However, SPDR SP 500 is 1.02 times less risky than Unusual Whales. It trades about 0.11 of its potential returns per unit of risk. Unusual Whales Subversive is currently generating about 0.06 per unit of risk. 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

SPDR SP 500  vs.  Unusual Whales Subversive

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.

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.

Pair Trading with SPDR SP and Unusual Whales

The main advantage of trading using opposite SPDR SP and Unusual Whales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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 SP 500 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..