Correlation Between SPDR Russell and Unified Series

Can any of the company-specific risk be diversified away by investing in both SPDR Russell and Unified Series 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 Unified Series 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 Unified Series Trust, you can compare the effects of market volatilities on SPDR Russell and Unified Series 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 Unified Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Unified Series.

Diversification Opportunities for SPDR Russell and Unified Series

0.92

Correlation Coefficient

SPDR Russell Unified Series

Almost no diversification

The 3 months correlation between SPDR Russell and Unified is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Unified Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unified Series Trust 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 Unified Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unified Series Trust has no effect on the direction of SPDR Russell i.e., SPDR Russell and Unified Series go up and down completely randomly.

Pair Corralation between SPDR Russell and Unified Series

Given the investment horizon of 90 days SPDR Russell 1000 is expected to under-perform the Unified Series. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Russell 1000 is 1.02 times less risky than Unified Series. The etf trades about -0.3 of its potential returns per unit of risk. The Unified Series Trust is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,157  in Unified Series Trust on December 20, 2022 and sell it today you would lose (35.00)  from holding Unified Series Trust or give up 1.62% of portfolio value over 90 days.

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

SPDR Russell 1000  vs.  Unified Series Trust

SPDR Russell 1000

SPDR Russell Performance

0 of 100

Over the last 90 days SPDR Russell 1000 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, SPDR Russell is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the insiders.

Unified Series Trust

Unified Performance

4 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Unified Series Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Unified Series is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR Russell and Unified Series

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

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The idea behind SPDR Russell 1000 and Unified Series Trust 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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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.