Correlation Between SPDR Kensho and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho 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 SPDR Kensho and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho New and SPDR SP Kensho, you can compare the effects of market volatilities on SPDR Kensho 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 SPDR Kensho with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and SPDR SP.
Diversification Opportunities for SPDR Kensho and SPDR SP
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and SPDR SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Kensho and SPDR Kensho 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 Kensho New 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 Kensho has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR Kensho and SPDR SP
Given the investment horizon of 90 days SPDR Kensho is expected to generate 1.52 times less return on investment than SPDR SP. But when comparing it to its historical volatility, SPDR Kensho New is 1.29 times less risky than SPDR SP. It trades about 0.21 of its potential returns per unit of risk. SPDR SP Kensho is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,966 in SPDR SP Kensho on July 27, 2025 and sell it today you would earn a total of 741.00 from holding SPDR SP Kensho or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho New vs. SPDR SP Kensho
Performance |
| Timeline |
| SPDR Kensho New |
| SPDR SP Kensho |
SPDR Kensho and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and SPDR SP
The main advantage of trading using opposite SPDR Kensho and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho 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.| SPDR Kensho vs. iShares Climate Conscious | SPDR Kensho vs. SPDR SP 400 | SPDR Kensho vs. iShares Core Aggressive | SPDR Kensho vs. The 2023 ETF |
| SPDR SP vs. Xtrackers Semiconductor Select | SPDR SP vs. Amplify ETF Trust | SPDR SP vs. Janus Henderson Sustainable | SPDR SP vs. iShares Energy Storage |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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