Correlation Between SPDR SP and Change Finance
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Change Finance 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 Change Finance 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 Change Finance Diversified, you can compare the effects of market volatilities on SPDR SP and Change Finance 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 Change Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Change Finance.
Diversification Opportunities for SPDR SP and Change Finance
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Change is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Change Finance Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Change Finance Diver 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 Change Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Change Finance Diver has no effect on the direction of SPDR SP i.e., SPDR SP and Change Finance go up and down completely randomly.
Pair Corralation between SPDR SP and Change Finance
Given the investment horizon of 90 days SPDR SP 500 is expected to under-perform the Change Finance. In addition to that, SPDR SP is 1.09 times more volatile than Change Finance Diversified. It trades about -0.05 of its total potential returns per unit of risk. Change Finance Diversified is currently generating about -0.02 per unit of volatility. If you would invest 3,802 in Change Finance Diversified on December 18, 2024 and sell it today you would lose (56.00) from holding Change Finance Diversified or give up 1.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR SP 500 vs. Change Finance Diversified
Performance |
Timeline |
SPDR SP 500 |
Change Finance Diver |
SPDR SP and Change Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR SP and Change Finance
The main advantage of trading using opposite SPDR SP and Change Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Change Finance 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 Change Finance will offset losses from the drop in Change Finance's long position.SPDR SP vs. SPDR SSGA Gender | SPDR SP vs. iShares MSCI ACWI | SPDR SP vs. iShares MSCI KLD | SPDR SP vs. iShares MSCI USA |
Change Finance vs. Amplify ETF Trust | Change Finance vs. iShares MSCI ACWI | Change Finance vs. First Trust EIP | Change Finance vs. SPDR SP 500 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |