Correlation Between Leverage Shares and SPDR Morningstar
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and SPDR Morningstar 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 Leverage Shares and SPDR Morningstar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and SPDR Morningstar Multi Asset, you can compare the effects of market volatilities on Leverage Shares and SPDR Morningstar 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 Leverage Shares with a short position of SPDR Morningstar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and SPDR Morningstar.
Diversification Opportunities for Leverage Shares and SPDR Morningstar
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leverage and SPDR is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and SPDR Morningstar Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Morningstar Multi and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with SPDR Morningstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Morningstar Multi has no effect on the direction of Leverage Shares i.e., Leverage Shares and SPDR Morningstar go up and down completely randomly.
Pair Corralation between Leverage Shares and SPDR Morningstar
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 26.4 times more return on investment than SPDR Morningstar. However, Leverage Shares is 26.4 times more volatile than SPDR Morningstar Multi Asset. It trades about 0.09 of its potential returns per unit of risk. SPDR Morningstar Multi Asset is currently generating about 0.02 per unit of risk. If you would invest 103,873 in Leverage Shares 3x on September 4, 2024 and sell it today you would earn a total of 151,767 from holding Leverage Shares 3x or generate 146.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Leverage Shares 3x vs. SPDR Morningstar Multi Asset
Performance |
| Timeline |
| Leverage Shares 3x |
| SPDR Morningstar Multi |
Leverage Shares and SPDR Morningstar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and SPDR Morningstar
The main advantage of trading using opposite Leverage Shares and SPDR Morningstar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, SPDR Morningstar 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 Morningstar will offset losses from the drop in SPDR Morningstar's long position.| Leverage Shares vs. Vanguard FTSE Developed | Leverage Shares vs. Leverage Shares 2x | Leverage Shares vs. Amundi Index Solutions | Leverage Shares vs. Amundi Index Solutions |
| SPDR Morningstar vs. SPDR Dow Jones | SPDR Morningstar vs. SPDR SP Dividend | SPDR Morningstar vs. SPDR Barclays Euro | SPDR Morningstar vs. SPDR SP Consumer |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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