Correlation Between SPDR SP and Cultivar ETF

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

By analyzing existing cross correlation between SPDR SP Dividend and Cultivar ETF, you can compare the effects of market volatilities on SPDR SP and Cultivar ETF 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 Cultivar ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Cultivar ETF.

Diversification Opportunities for SPDR SP and Cultivar ETF

0.87

Correlation Coefficient

SPDR SP  Cultivar ETF

Very poor diversification

The 3 months correlation between SPDR and Cultivar is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Dividend and Cultivar ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cultivar ETF 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 Dividend are associated (or correlated) with Cultivar ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cultivar ETF has no effect on the direction of SPDR SP i.e., SPDR SP and Cultivar ETF go up and down completely randomly.

Pair Corralation between SPDR SP and Cultivar ETF

Considering the 90-day investment horizon SPDR SP is expected to generate 1.24 times less return on investment than Cultivar ETF. But when comparing it to its historical volatility, SPDR SP Dividend is 1.19 times less risky than Cultivar ETF. It trades about 0.1 of its potential returns per unit of risk. Cultivar ETF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,663  in Cultivar ETF on August 30, 2024 and sell it today you would earn a total of  110.00  from holding Cultivar ETF or generate 4.13% return on investment over 90 days.

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

SPDR SP Dividend  vs.  Cultivar ETF

SPDR SP Dividend

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP Dividend are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, SPDR SP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cultivar ETF

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cultivar ETF are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Cultivar ETF is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SPDR SP and Cultivar ETF

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

The idea behind SPDR SP Dividend and Cultivar 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.