Correlation Between SPDR Portfolio and Retireful

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

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

Diversification Opportunities for SPDR Portfolio and Retireful

0.11

Correlation Coefficient

SPDR Portfolio  Retireful

Average diversification

The 3 months correlation between SPDR and Retireful is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and Retireful in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retireful and SPDR Portfolio 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 Portfolio SP are associated (or correlated) with Retireful. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retireful has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Retireful go up and down completely randomly.

Pair Corralation between SPDR Portfolio and Retireful

Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 49.04 times more return on investment than Retireful. However, SPDR Portfolio is 49.04 times more volatile than Retireful. It trades about 0.16 of its potential returns per unit of risk. Retireful is currently generating about 0.44 per unit of risk. If you would invest  8,277  in SPDR Portfolio SP on September 26, 2024 and sell it today you would earn a total of  835.00  from holding SPDR Portfolio SP or generate 10.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	7.94%
Values	Daily Returns

SPDR Portfolio SP  vs.  Retireful

SPDR Portfolio SP

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio SP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SPDR Portfolio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Retireful

Risk-Adjusted Performance

0 of 100

Very Strong

Over the last 90 days Retireful has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Retireful is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SPDR Portfolio and Retireful

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

The idea behind SPDR Portfolio SP and Retireful 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.