Correlation Between SPDR Barclays and Lexibook Linguistic
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Lexibook Linguistic 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 Barclays and Lexibook Linguistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Euro and Lexibook Linguistic Electronic, you can compare the effects of market volatilities on SPDR Barclays and Lexibook Linguistic 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 Barclays with a short position of Lexibook Linguistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Lexibook Linguistic.
Diversification Opportunities for SPDR Barclays and Lexibook Linguistic
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Lexibook is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Euro and Lexibook Linguistic Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexibook Linguistic and SPDR Barclays 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 Barclays Euro are associated (or correlated) with Lexibook Linguistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexibook Linguistic has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Lexibook Linguistic go up and down completely randomly.
Pair Corralation between SPDR Barclays and Lexibook Linguistic
Assuming the 90 days trading horizon SPDR Barclays is expected to generate 3.24 times less return on investment than Lexibook Linguistic. But when comparing it to its historical volatility, SPDR Barclays Euro is 1.71 times less risky than Lexibook Linguistic. It trades about 0.02 of its potential returns per unit of risk. Lexibook Linguistic Electronic is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 285.00 in Lexibook Linguistic Electronic on August 30, 2024 and sell it today you would earn a total of 114.00 from holding Lexibook Linguistic Electronic or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.82% |
| Values | Daily Returns |
SPDR Barclays Euro vs. Lexibook Linguistic Electronic
Performance |
| Timeline |
| SPDR Barclays Euro |
| Lexibook Linguistic |
SPDR Barclays and Lexibook Linguistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Lexibook Linguistic
The main advantage of trading using opposite SPDR Barclays and Lexibook Linguistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Lexibook Linguistic 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 Lexibook Linguistic will offset losses from the drop in Lexibook Linguistic's long position.| SPDR Barclays vs. Amundi ETF Govies | SPDR Barclays vs. iShares STOXX Europe | SPDR Barclays vs. iShares Global Infrastructure | SPDR Barclays vs. SPDR MSCI World |
| Lexibook Linguistic vs. Nexity | Lexibook Linguistic vs. Icade SA | Lexibook Linguistic vs. Rubis SCA | Lexibook Linguistic vs. SCOR SE |
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 Stocks Directory module to find actively traded stocks across global markets.
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