Correlation Between SPDR SP and United States
Can any of the company-specific risk be diversified away by investing in both SPDR SP and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Insurance and United States Oil, you can compare the effects of market volatilities on SPDR SP and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and United States.
Diversification Opportunities for SPDR SP and United States
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and United is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Insurance and United States Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Oil 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 Insurance are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Oil has no effect on the direction of SPDR SP i.e., SPDR SP and United States go up and down completely randomly.
Pair Corralation between SPDR SP and United States
Considering the 90-day investment horizon SPDR SP Insurance is expected to under-perform the United States. In addition to that, SPDR SP is 1.03 times more volatile than United States Oil. It trades about -0.19 of its total potential returns per unit of risk. United States Oil is currently generating about 0.07 per unit of volatility. If you would invest 7,776 in United States Oil on January 24, 2024 and sell it today you would earn a total of 102.00 from holding United States Oil or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPDR SP Insurance vs. United States Oil
Performance |
| Timeline |
| SPDR SP Insurance |
| United States Oil |
SPDR SP and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and United States
The main advantage of trading using opposite SPDR SP and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| SPDR SP vs. Virtus InfraCap Preferred | SPDR SP vs. XAI Octagon Floating | SPDR SP vs. Amplify High Income | SPDR SP vs. Triplepoint Venture Growth |
| United States vs. United States Natural | United States vs. SPDR Gold Shares | United States vs. ProShares Ultra Bloomberg | United States vs. Energy Select Sector |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |