Correlation Between Russell Top and SP 500

By analyzing existing cross correlation between Russell Top 200 and SP 500 Growth, you can compare the effects of market volatilities on Russell Top and SP 500 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 Russell Top with a short position of SP 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Russell Top and SP 500.

Specify exactly 2 symbols:

Can any of the company-specific risk be diversified away by investing in both Russell Top and SP 500 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 Russell Top and SP 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for Russell Top and SP 500

1.0
  Correlation Coefficient
Russell Top 200
SP 500 Growth

No risk reduction

The 3 months correlation between Russell and SP 500 is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Russell Top 200 and SP 500 Growth in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on SP 500 Growth and Russell Top 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 Russell Top 200 are associated (or correlated) with SP 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP 500 Growth has no effect on the direction of Russell Top i.e., Russell Top and SP 500 go up and down completely randomly.

Pair Corralation between Russell Top and SP 500

Considering the 90-day investment horizon Russell Top 200 is expected to generate 1.01 times more return on investment than SP 500. However, Russell Top is 1.01 times more volatile than SP 500 Growth. It trades about 0.07 of its potential returns per unit of risk. SP 500 Growth is currently generating about 0.07 per unit of risk. If you would invest  9,367  in Russell Top 200 on September 4, 2021 and sell it today you would earn a total of  7,071  from holding Russell Top 200 or generate 75.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Russell Top 200  vs.  SP 500 Growth

 Performance (%) 
      Timeline 
Russell Top 200 
Russell Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Russell Top 200 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Russell Top is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Russell Price Channel

SP 500 Growth 
SP 500 Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in SP 500 Growth are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SP 500 is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

SP 500 Price Channel

Russell Top and SP 500 Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Russell Top and SP 500

The main advantage of trading using opposite Russell Top and SP 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Russell Top position performs unexpectedly, SP 500 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 SP 500 will offset losses from the drop in SP 500's long position.

Russell Top 200

Pair trading matchups for Russell Top

The idea behind Russell Top 200 and SP 500 Growth 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.

SP 500 Growth

Pair trading matchups for SP 500

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

Other Complementary Tools

My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go