Correlation Between AlphaMark Actively and SPDR SP
Can any of the company-specific risk be diversified away by investing in both AlphaMark Actively and SPDR SP 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 AlphaMark Actively and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AlphaMark Actively Managed and SPDR SP 1500, you can compare the effects of market volatilities on AlphaMark Actively and SPDR SP 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 AlphaMark Actively with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AlphaMark Actively and SPDR SP.
Diversification Opportunities for AlphaMark Actively and SPDR SP
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AlphaMark and SPDR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AlphaMark Actively Managed and SPDR SP 1500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 1500 and AlphaMark Actively 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 AlphaMark Actively Managed are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 1500 has no effect on the direction of AlphaMark Actively i.e., AlphaMark Actively and SPDR SP go up and down completely randomly.
Pair Corralation between AlphaMark Actively and SPDR SP
Given the investment horizon of 90 days AlphaMark Actively Managed is expected to under-perform the SPDR SP. In addition to that, AlphaMark Actively is 1.71 times more volatile than SPDR SP 1500. It trades about 0.0 of its total potential returns per unit of risk. SPDR SP 1500 is currently generating about 0.11 per unit of volatility. If you would invest 15,966 in SPDR SP 1500 on January 20, 2024 and sell it today you would earn a total of 664.00 from holding SPDR SP 1500 or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
AlphaMark Actively Managed vs. SPDR SP 1500
Performance |
| Timeline |
| AlphaMark Actively |
| SPDR SP 1500 |
AlphaMark Actively and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AlphaMark Actively and SPDR SP
The main advantage of trading using opposite AlphaMark Actively and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AlphaMark Actively position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| AlphaMark Actively vs. First Trust RiverFront | AlphaMark Actively vs. First Trust RiverFront | AlphaMark Actively vs. Arrow DWA Tactical | AlphaMark Actively vs. First Trust Developed |
| SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. Matthews China Discovery | SPDR SP vs. Davis Select International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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