Correlation Between BetaPro SPTSX and Purpose Multi

Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and Purpose Multi 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 Purpose Multi 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 Purpose Multi Strategy Market, you can compare the effects of market volatilities on BetaPro SPTSX and Purpose Multi 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 Purpose Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Purpose Multi.

Diversification Opportunities for BetaPro SPTSX and Purpose Multi

0.96

Correlation Coefficient

BetaPro SPTSX  Purpose Multi

Almost no diversification

The 3 months correlation between BetaPro and Purpose is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX Capped and Purpose Multi Strategy Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Purpose Multi Strategy 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 Purpose Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Purpose Multi Strategy has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Purpose Multi go up and down completely randomly.

Pair Corralation between BetaPro SPTSX and Purpose Multi

Assuming the 90 days trading horizon BetaPro SPTSX Capped is expected to generate 1.75 times more return on investment than Purpose Multi. However, BetaPro SPTSX is 1.75 times more volatile than Purpose Multi Strategy Market. It trades about 0.45 of its potential returns per unit of risk. Purpose Multi Strategy Market is currently generating about 0.17 per unit of risk. If you would invest  2,909  in BetaPro SPTSX Capped on April 23, 2025 and sell it today you would earn a total of  932.00  from holding BetaPro SPTSX Capped or generate 32.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

BetaPro SPTSX Capped  vs.  Purpose Multi Strategy Market

BetaPro SPTSX Capped

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in BetaPro SPTSX Capped are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BetaPro SPTSX displayed solid returns over the last few months and may actually be approaching a breakup point.

Purpose Multi Strategy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Purpose Multi Strategy Market are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Purpose Multi is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BetaPro SPTSX and Purpose Multi

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

The idea behind BetaPro SPTSX Capped and Purpose Multi Strategy Market 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.