Correlation Between SPDR SP and Alexis Practical
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Alexis Practical 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 Alexis Practical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Kensho and Alexis Practical Tactical, you can compare the effects of market volatilities on SPDR SP and Alexis Practical 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 Alexis Practical. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Alexis Practical.
Diversification Opportunities for SPDR SP and Alexis Practical
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Alexis is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Kensho and Alexis Practical Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexis Practical Tactical 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 Kensho are associated (or correlated) with Alexis Practical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexis Practical Tactical has no effect on the direction of SPDR SP i.e., SPDR SP and Alexis Practical go up and down completely randomly.
Pair Corralation between SPDR SP and Alexis Practical
Given the investment horizon of 90 days SPDR SP Kensho is expected to generate 2.05 times more return on investment than Alexis Practical. However, SPDR SP is 2.05 times more volatile than Alexis Practical Tactical. It trades about 0.12 of its potential returns per unit of risk. Alexis Practical Tactical is currently generating about 0.03 per unit of risk. If you would invest 6,092 in SPDR SP Kensho on September 24, 2024 and sell it today you would earn a total of 614.00 from holding SPDR SP Kensho or generate 10.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR SP Kensho vs. Alexis Practical Tactical
Performance |
Timeline |
SPDR SP Kensho |
Alexis Practical Tactical |
SPDR SP and Alexis Practical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR SP and Alexis Practical
The main advantage of trading using opposite SPDR SP and Alexis Practical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Alexis Practical 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 Alexis Practical will offset losses from the drop in Alexis Practical's long position.SPDR SP vs. SPDR SP Kensho | SPDR SP vs. SPDR SP Kensho | SPDR SP vs. SPDR Kensho New | SPDR SP vs. SPDR Kensho Clean |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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