Correlation Between AMS Small and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both AMS Small and SPDR MSCI 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 AMS Small and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMS Small Cap and SPDR MSCI World, you can compare the effects of market volatilities on AMS Small and SPDR MSCI 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 AMS Small with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMS Small and SPDR MSCI.
Diversification Opportunities for AMS Small and SPDR MSCI
Average diversification
The 3 months correlation between AMS and SPDR is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AMS Small Cap and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World and AMS Small 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 AMS Small Cap are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of AMS Small i.e., AMS Small and SPDR MSCI go up and down completely randomly.
Pair Corralation between AMS Small and SPDR MSCI
Assuming the 90 days trading horizon AMS Small Cap is expected to under-perform the SPDR MSCI. In addition to that, AMS Small is 1.45 times more volatile than SPDR MSCI World. It trades about 0.0 of its total potential returns per unit of risk. SPDR MSCI World is currently generating about 0.06 per unit of volatility. If you would invest 5,185 in SPDR MSCI World on August 31, 2024 and sell it today you would earn a total of 743.00 from holding SPDR MSCI World or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
AMS Small Cap vs. SPDR MSCI World
Performance |
| Timeline |
AMS Small and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
AMS Small Cap
Pair trading matchups for AMS Small
SPDR MSCI World
Pair trading matchups for SPDR MSCI
Pair Trading with AMS Small and SPDR MSCI
The main advantage of trading using opposite AMS Small and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMS Small position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI's long position.| AMS Small vs. AMG Advanced Metallurgical | AMS Small vs. Vastned Retail NV | AMS Small vs. Reinet Investments SCA | AMS Small vs. Tetragon Financial Group |
| SPDR MSCI vs. iShares Core MSCI | SPDR MSCI vs. BlackRock ESG Multi Asset | SPDR MSCI vs. Pershing Square Holdings | SPDR MSCI vs. ASML Holding NV |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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