Correlation Between SPDR FactSet and Defiance Quantum

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

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

Diversification Opportunities for SPDR FactSet and Defiance Quantum

0.83

Correlation Coefficient

SPDR FactSet  Defiance Quantum

Very poor diversification

The 3 months correlation between SPDR and Defiance is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FactSet Innovative and Defiance Quantum ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Quantum ETF and SPDR FactSet 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 FactSet Innovative are associated (or correlated) with Defiance Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Quantum ETF has no effect on the direction of SPDR FactSet i.e., SPDR FactSet and Defiance Quantum go up and down completely randomly.

Pair Corralation between SPDR FactSet and Defiance Quantum

Given the investment horizon of 90 days SPDR FactSet Innovative is expected to generate 0.91 times more return on investment than Defiance Quantum. However, SPDR FactSet Innovative is 1.09 times less risky than Defiance Quantum. It trades about -0.05 of its potential returns per unit of risk. Defiance Quantum ETF is currently generating about -0.06 per unit of risk. If you would invest  17,682  in SPDR FactSet Innovative on December 27, 2024 and sell it today you would lose (987.00) from holding SPDR FactSet Innovative or give up 5.58% of portfolio value over 90 days.

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

SPDR FactSet Innovative  vs.  Defiance Quantum ETF

SPDR FactSet Innovative

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR FactSet Innovative has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SPDR FactSet is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Defiance Quantum ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Defiance Quantum ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with SPDR FactSet and Defiance Quantum

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

The idea behind SPDR FactSet Innovative and Defiance Quantum ETF 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.