Correlation Between Procure Space and SPDR Kensho

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

By analyzing existing cross correlation between Procure Space ETF and SPDR Kensho Clean, you can compare the effects of market volatilities on Procure Space and SPDR Kensho 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 Procure Space with a short position of SPDR Kensho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procure Space and SPDR Kensho.

Diversification Opportunities for Procure Space and SPDR Kensho

0.14

Correlation Coefficient

Procure Space  SPDR Kensho

Average diversification

The 3 months correlation between Procure and SPDR is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Procure Space ETF and SPDR Kensho Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho Clean and Procure Space 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 Procure Space ETF are associated (or correlated) with SPDR Kensho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Kensho Clean has no effect on the direction of Procure Space i.e., Procure Space and SPDR Kensho go up and down completely randomly.

Pair Corralation between Procure Space and SPDR Kensho

Considering the 90-day investment horizon Procure Space ETF is expected to generate 1.62 times more return on investment than SPDR Kensho. However, Procure Space is 1.62 times more volatile than SPDR Kensho Clean. It trades about 0.26 of its potential returns per unit of risk. SPDR Kensho Clean is currently generating about 0.16 per unit of risk. If you would invest  2,141  in Procure Space ETF on September 18, 2024 and sell it today you would earn a total of  197.00  from holding Procure Space ETF or generate 9.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Procure Space ETF  vs.  SPDR Kensho Clean

Procure Space ETF

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Procure Space ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Procure Space displayed solid returns over the last few months and may actually be approaching a breakup point.

SPDR Kensho Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Kensho Clean has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPDR Kensho is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Procure Space and SPDR Kensho

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

The idea behind Procure Space ETF and SPDR Kensho Clean 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.