Correlation Between SPDR Russell and Chicken Soup

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

By analyzing existing cross correlation between SPDR Russell 1000 and Chicken Soup for, you can compare the effects of market volatilities on SPDR Russell and Chicken Soup 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 Russell with a short position of Chicken Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Chicken Soup.

Diversification Opportunities for SPDR Russell and Chicken Soup

-0.36

Correlation Coefficient

SPDR Russell  Chicken Soup

Very good diversification

The 3 months correlation between SPDR and Chicken is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Chicken Soup for in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicken Soup for and SPDR Russell 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 Russell 1000 are associated (or correlated) with Chicken Soup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicken Soup for has no effect on the direction of SPDR Russell i.e., SPDR Russell and Chicken Soup go up and down completely randomly.

Pair Corralation between SPDR Russell and Chicken Soup

Given the investment horizon of 90 days SPDR Russell 1000 is expected to generate 0.09 times more return on investment than Chicken Soup. However, SPDR Russell 1000 is 11.01 times less risky than Chicken Soup. It trades about 0.11 of its potential returns per unit of risk. Chicken Soup for is currently generating about 0.01 per unit of risk. If you would invest  10,454  in SPDR Russell 1000 on January 25, 2024 and sell it today you would earn a total of  532.00  from holding SPDR Russell 1000 or generate 5.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

SPDR Russell 1000  vs.  Chicken Soup for

SPDR Russell 1000

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Russell 1000 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, SPDR Russell is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Chicken Soup for

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chicken Soup for has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Chicken Soup is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SPDR Russell and Chicken Soup

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

The idea behind SPDR Russell 1000 and Chicken Soup for 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.