Correlation Between SPDR Kensho and Flexshares Global

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho and Flexshares 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 SPDR Kensho and Flexshares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho Intelligent and Flexshares Global Broad, you can compare the effects of market volatilities on SPDR Kensho and Flexshares 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 SPDR Kensho with a short position of Flexshares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and Flexshares Global.

Diversification Opportunities for SPDR Kensho and Flexshares Global

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between SPDR Kensho and Flexshares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho Intelligent and Flexshares Global Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexshares Global Broad 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 Intelligent are associated (or correlated) with Flexshares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexshares Global Broad has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and Flexshares Global go up and down completely randomly.

Pair Corralation between SPDR Kensho and Flexshares Global

Given the investment horizon of 90 days SPDR Kensho Intelligent is expected to generate 1.89 times more return on investment than Flexshares Global. However, SPDR Kensho is 1.89 times more volatile than Flexshares Global Broad. It trades about 0.01 of its potential returns per unit of risk. Flexshares Global Broad is currently generating about -0.01 per unit of risk. If you would invest  3,417  in SPDR Kensho Intelligent on July 7, 2022 and sell it today you would lose (23.00)  from holding SPDR Kensho Intelligent or give up 0.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

SPDR Kensho Intelligent  vs.  Flexshares Global Broad

 Performance (%) 
       Timeline  
SPDR Kensho Intelligent 
SPDR Kensho Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Kensho Intelligent are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, SPDR Kensho is not utilizing all of its potentials. The new stock price agitation, may contribute to short-term losses for the retail investors.

SPDR Kensho Price Channel

Flexshares Global Broad 
Flexshares Performance
0 of 100
Over the last 90 days Flexshares Global Broad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Flexshares Price Channel

SPDR Kensho and Flexshares Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPDR Kensho and Flexshares Global

The main advantage of trading using opposite SPDR Kensho and Flexshares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho position performs unexpectedly, Flexshares 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 Flexshares Global will offset losses from the drop in Flexshares Global's long position.
SPDR Kensho vs. 3M Company
The idea behind SPDR Kensho Intelligent and Flexshares Global Broad 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.
Flexshares Global vs. 3M Company
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go