Correlation Between Procure Space and SPDR SP

Can any of the company-specific risk be diversified away by investing in both Procure Space and SPDR SP 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 SP 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 SP Kensho, you can compare the effects of market volatilities on Procure Space and SPDR SP 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 SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procure Space and SPDR SP.

Diversification Opportunities for Procure Space and SPDR SP

0.35

Correlation Coefficient

Procure Space  SPDR SP

Weak diversification

The 3 months correlation between Procure and SPDR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Procure Space ETF and SPDR SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Kensho 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 SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Kensho has no effect on the direction of Procure Space i.e., Procure Space and SPDR SP go up and down completely randomly.

Pair Corralation between Procure Space and SPDR SP

Considering the 90-day investment horizon Procure Space ETF is expected to generate 2.07 times more return on investment than SPDR SP. However, Procure Space is 2.07 times more volatile than SPDR SP Kensho. It trades about 0.01 of its potential returns per unit of risk. SPDR SP Kensho is currently generating about -0.11 per unit of risk. If you would invest  2,399  in Procure Space ETF on December 26, 2024 and sell it today you would lose (20.00) from holding Procure Space ETF or give up 0.83% of portfolio value over 90 days.

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

Procure Space ETF  vs.  SPDR SP Kensho

Procure Space ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Procure Space ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Procure Space is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

SPDR SP Kensho

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR SP Kensho has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Procure Space and SPDR SP

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

The idea behind Procure Space ETF and SPDR SP Kensho 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.