Correlation Between BetaPro SPTSX and Dynamic Active

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

By analyzing existing cross correlation between BetaPro SPTSX Capped and Dynamic Active Retirement, you can compare the effects of market volatilities on BetaPro SPTSX and Dynamic Active 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 Dynamic Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Dynamic Active.

Diversification Opportunities for BetaPro SPTSX and Dynamic Active

-0.9

Correlation Coefficient

BetaPro SPTSX  Dynamic Active

Pay attention - limited upside

The 3 months correlation between BetaPro and Dynamic is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX Capped and Dynamic Active Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Active Retirement 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 Capped are associated (or correlated) with Dynamic Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Active Retirement has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Dynamic Active go up and down completely randomly.

Pair Corralation between BetaPro SPTSX and Dynamic Active

Assuming the 90 days trading horizon BetaPro SPTSX Capped is expected to under-perform the Dynamic Active. In addition to that, BetaPro SPTSX is 7.71 times more volatile than Dynamic Active Retirement. It trades about -0.15 of its total potential returns per unit of risk. Dynamic Active Retirement is currently generating about 0.39 per unit of volatility. If you would invest  2,153  in Dynamic Active Retirement on April 21, 2025 and sell it today you would earn a total of  189.00  from holding Dynamic Active Retirement or generate 8.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

BetaPro SPTSX Capped  vs.  Dynamic Active Retirement

BetaPro SPTSX Capped

Risk-Adjusted Performance

Very Weak

Over the last 90 days BetaPro SPTSX Capped has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Dynamic Active Retirement

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Active Retirement are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dynamic Active may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BetaPro SPTSX and Dynamic Active

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

The idea behind BetaPro SPTSX Capped and Dynamic Active Retirement 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.