Correlation Between BCV Swiss and SPDR Dow
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By analyzing existing cross correlation between BCV Swiss Franc and SPDR Dow Jones, you can compare the effects of market volatilities on BCV Swiss and SPDR Dow 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 BCV Swiss with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCV Swiss and SPDR Dow.
Diversification Opportunities for BCV Swiss and SPDR Dow
Significant diversification
The 3 months correlation between BCV and SPDR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BCV Swiss Franc and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and BCV Swiss 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 BCV Swiss Franc are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of BCV Swiss i.e., BCV Swiss and SPDR Dow go up and down completely randomly.
Pair Corralation between BCV Swiss and SPDR Dow
Assuming the 90 days trading horizon BCV Swiss is expected to generate 2.13 times less return on investment than SPDR Dow. But when comparing it to its historical volatility, BCV Swiss Franc is 6.34 times less risky than SPDR Dow. It trades about 0.14 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,611 in SPDR Dow Jones on September 20, 2024 and sell it today you would earn a total of 148.00 from holding SPDR Dow Jones or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BCV Swiss Franc vs. SPDR Dow Jones
Performance |
| Timeline |
| BCV Swiss Franc |
| SPDR Dow Jones |
BCV Swiss and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCV Swiss and SPDR Dow
The main advantage of trading using opposite BCV Swiss and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCV Swiss position performs unexpectedly, SPDR Dow 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 Dow will offset losses from the drop in SPDR Dow's long position.The idea behind BCV Swiss Franc and SPDR Dow Jones 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.| SPDR Dow vs. Baloise Holding AG | SPDR Dow vs. 21Shares Polkadot ETP | SPDR Dow vs. UBS ETF MSCI | SPDR Dow vs. BB Biotech AG |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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