Correlation Between BetaPro SPTSX and Tech Leaders

Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and Tech Leaders 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 BetaPro SPTSX and Tech Leaders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BetaPro SPTSX 60 and Tech Leaders Income, you can compare the effects of market volatilities on BetaPro SPTSX and Tech Leaders 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 BetaPro SPTSX with a short position of Tech Leaders. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Tech Leaders.

Diversification Opportunities for BetaPro SPTSX and Tech Leaders

-0.98

Correlation Coefficient

BetaPro SPTSX  Tech Leaders

Pay attention - limited upside

The 3 months correlation between BetaPro and Tech is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and Tech Leaders Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tech Leaders Income and BetaPro SPTSX 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 BetaPro SPTSX 60 are associated (or correlated) with Tech Leaders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tech Leaders Income has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Tech Leaders go up and down completely randomly.

Pair Corralation between BetaPro SPTSX and Tech Leaders

Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the Tech Leaders. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SPTSX 60 is 2.18 times less risky than Tech Leaders. The etf trades about -0.34 of its potential returns per unit of risk. The Tech Leaders Income is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  2,136  in Tech Leaders Income on April 24, 2025 and sell it today you would earn a total of  457.00  from holding Tech Leaders Income or generate 21.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

BetaPro SPTSX 60  vs.  Tech Leaders Income

BetaPro SPTSX 60

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro SPTSX 60 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Tech Leaders Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tech Leaders Income are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Tech Leaders displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BetaPro SPTSX and Tech Leaders

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

The idea behind BetaPro SPTSX 60 and Tech Leaders Income 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.