Correlation Between SSgA SPDR and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and Lyxor UCITS 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 SSgA SPDR and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSgA SPDR ETFs and Lyxor UCITS Japan, you can compare the effects of market volatilities on SSgA SPDR and Lyxor UCITS 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 SSgA SPDR with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and Lyxor UCITS.
Diversification Opportunities for SSgA SPDR and Lyxor UCITS
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SSgA and Lyxor is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Lyxor UCITS Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Japan and SSgA SPDR 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 SSgA SPDR ETFs are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Japan has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Lyxor UCITS go up and down completely randomly.
Pair Corralation between SSgA SPDR and Lyxor UCITS
Assuming the 90 days trading horizon SSgA SPDR is expected to generate 2.44 times less return on investment than Lyxor UCITS. But when comparing it to its historical volatility, SSgA SPDR ETFs is 1.43 times less risky than Lyxor UCITS. It trades about 0.03 of its potential returns per unit of risk. Lyxor UCITS Japan is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,325 in Lyxor UCITS Japan on August 27, 2024 and sell it today you would earn a total of 2,120 from holding Lyxor UCITS Japan or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. Lyxor UCITS Japan
Performance |
| Timeline |
| SSgA SPDR ETFs |
| Lyxor UCITS Japan |
SSgA SPDR and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and Lyxor UCITS
The main advantage of trading using opposite SSgA SPDR and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS's long position.| SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Stoxx | SSgA SPDR vs. Gold Bullion Securities | SSgA SPDR vs. Xtrackers MSCI Europe |
| Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Gold Bullion Securities | Lyxor UCITS vs. Xtrackers MSCI Europe | Lyxor UCITS vs. SPDR SP 500 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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