Correlation Between SPDR Portfolio and New Hampshire

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

Diversification Opportunities for SPDR Portfolio and New Hampshire

0.86

Correlation Coefficient

SPDR Portfolio  New Hampshire

Very poor diversification

The 3 months correlation between SPDR and New is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and New Hampshire Higher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hampshire Higher 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 New Hampshire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hampshire Higher has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and New Hampshire go up and down completely randomly.

Pair Corralation between SPDR Portfolio and New Hampshire

Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 1.95 times more return on investment than New Hampshire. However, SPDR Portfolio is 1.95 times more volatile than New Hampshire Higher. It trades about 0.02 of its potential returns per unit of risk. New Hampshire Higher is currently generating about -0.01 per unit of risk. If you would invest  7,300  in SPDR Portfolio SP on February 8, 2024 and sell it today you would earn a total of  20.00  from holding SPDR Portfolio SP or generate 0.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

SPDR Portfolio SP  vs.  New Hampshire Higher

SPDR Portfolio SP

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Portfolio SP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SPDR Portfolio is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

New Hampshire Higher

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in New Hampshire Higher are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, New Hampshire is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Portfolio and New Hampshire

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

The idea behind SPDR Portfolio SP and New Hampshire Higher 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.