Correlation Between Series Portfolios and SPDR Global

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Can any of the company-specific risk be diversified away by investing in both Series Portfolios and SPDR Global 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 Series Portfolios and SPDR Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Series Portfolios Trust and SPDR Global Dow, you can compare the effects of market volatilities on Series Portfolios and SPDR Global 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 Series Portfolios with a short position of SPDR Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Series Portfolios and SPDR Global.

Diversification Opportunities for Series Portfolios and SPDR Global

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Series and SPDR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Series Portfolios Trust and SPDR Global Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Global Dow and Series Portfolios 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 Series Portfolios Trust are associated (or correlated) with SPDR Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Global Dow has no effect on the direction of Series Portfolios i.e., Series Portfolios and SPDR Global go up and down completely randomly.

Pair Corralation between Series Portfolios and SPDR Global

Given the investment horizon of 90 days Series Portfolios Trust is expected to generate 0.95 times more return on investment than SPDR Global. However, Series Portfolios Trust is 1.05 times less risky than SPDR Global. It trades about 0.19 of its potential returns per unit of risk. SPDR Global Dow is currently generating about 0.05 per unit of risk. If you would invest  2,954  in Series Portfolios Trust on December 30, 2023 and sell it today you would earn a total of  430.00  from holding Series Portfolios Trust or generate 14.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy14.98%
ValuesDaily Returns

Series Portfolios Trust  vs.  SPDR Global Dow

 Performance 
       Timeline  
Series Portfolios Trust 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Series Portfolios Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Series Portfolios may actually be approaching a critical reversion point that can send shares even higher in April 2024.
SPDR Global Dow 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Global Dow are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, SPDR Global may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Series Portfolios and SPDR Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Series Portfolios and SPDR Global

The main advantage of trading using opposite Series Portfolios and SPDR Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Series Portfolios position performs unexpectedly, SPDR Global 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 SPDR Global will offset losses from the drop in SPDR Global's long position.
The idea behind Series Portfolios Trust and SPDR Global Dow 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.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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