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 New, 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

0.95

Correlation Coefficient

Procure Space  SPDR Kensho

Almost no diversification

The 3 months correlation between Procure and SPDR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Procure Space ETF and SPDR Kensho New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Kensho New 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 New 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 is expected to generate 1.36 times less return on investment than SPDR Kensho. In addition to that, Procure Space is 1.18 times more volatile than SPDR Kensho New. It trades about 0.04 of its total potential returns per unit of risk. SPDR Kensho New is currently generating about 0.06 per unit of volatility. If you would invest  3,745  in SPDR Kensho New on September 18, 2024 and sell it today you would earn a total of  1,680  from holding SPDR Kensho New or generate 44.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Procure Space ETF  vs.  SPDR Kensho New

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 New

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Kensho New are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, SPDR Kensho reported solid returns over the last few months and may actually be approaching a breakup point.

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 New 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..