Correlation Between SPDR SPASX and Ecofibre
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and Ecofibre 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 SPDR SPASX and Ecofibre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and Ecofibre, you can compare the effects of market volatilities on SPDR SPASX and Ecofibre 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 SPDR SPASX with a short position of Ecofibre. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and Ecofibre.
Diversification Opportunities for SPDR SPASX and Ecofibre
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and Ecofibre is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and Ecofibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofibre and SPDR SPASX 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 SPDR SPASX 200 are associated (or correlated) with Ecofibre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofibre has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and Ecofibre go up and down completely randomly.
Pair Corralation between SPDR SPASX and Ecofibre
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 0.09 times more return on investment than Ecofibre. However, SPDR SPASX 200 is 11.39 times less risky than Ecofibre. It trades about 0.12 of its potential returns per unit of risk. Ecofibre is currently generating about 0.0 per unit of risk. If you would invest 2,183 in SPDR SPASX 200 on August 25, 2024 and sell it today you would earn a total of 510.00 from holding SPDR SPASX 200 or generate 23.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. Ecofibre
Performance |
| Timeline |
| SPDR SPASX 200 |
| Ecofibre |
SPDR SPASX and Ecofibre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and Ecofibre
The main advantage of trading using opposite SPDR SPASX and Ecofibre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, Ecofibre 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 Ecofibre will offset losses from the drop in Ecofibre's long position.| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
| Ecofibre vs. Energy Resources | Ecofibre vs. 88 Energy | Ecofibre vs. Amani Gold | Ecofibre vs. A1 Investments Resources |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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