Correlation Between Cboe UK and SPDR MSCI
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By analyzing existing cross correlation between Cboe UK Consumer and SPDR MSCI Europe, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and SPDR MSCI.
Diversification Opportunities for Cboe UK and SPDR MSCI
Pay attention - limited upside
The 3 months correlation between Cboe and SPDR is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe and Cboe UK 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 Cboe UK Consumer 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 Europe has no effect on the direction of Cboe UK i.e., Cboe UK and SPDR MSCI go up and down completely randomly.
Pair Corralation between Cboe UK and SPDR MSCI
Assuming the 90 days trading horizon Cboe UK Consumer is expected to generate 1.38 times more return on investment than SPDR MSCI. However, Cboe UK is 1.38 times more volatile than SPDR MSCI Europe. It trades about 0.5 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about -0.2 per unit of risk. If you would invest 2,925,026 in Cboe UK Consumer on August 30, 2024 and sell it today you would earn a total of 336,221 from holding Cboe UK Consumer or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cboe UK Consumer vs. SPDR MSCI Europe
Performance |
| Timeline |
Cboe UK and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
SPDR MSCI Europe
Pair trading matchups for SPDR MSCI
Pair Trading with Cboe UK and SPDR MSCI
The main advantage of trading using opposite Cboe UK and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. Liberty Media Corp | Cboe UK vs. XLMedia PLC | Cboe UK vs. Scandinavian Tobacco Group | Cboe UK vs. Catena Media PLC |
| SPDR MSCI vs. SPDR Dow Jones | SPDR MSCI vs. SPDR SP Dividend | SPDR MSCI vs. SPDR Barclays Euro | SPDR MSCI 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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