Correlation Between SPDR Barclays and Centrale DAchat
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Centrale DAchat 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 Centrale DAchat 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 Centrale dAchat Franaise, you can compare the effects of market volatilities on SPDR Barclays and Centrale DAchat 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 Centrale DAchat. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Centrale DAchat.
Diversification Opportunities for SPDR Barclays and Centrale DAchat
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and Centrale is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Euro and Centrale dAchat Franaise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrale dAchat Franaise 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 Centrale DAchat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrale dAchat Franaise has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Centrale DAchat go up and down completely randomly.
Pair Corralation between SPDR Barclays and Centrale DAchat
Assuming the 90 days trading horizon SPDR Barclays Euro is expected to generate 0.1 times more return on investment than Centrale DAchat. However, SPDR Barclays Euro is 9.59 times less risky than Centrale DAchat. It trades about 0.2 of its potential returns per unit of risk. Centrale dAchat Franaise is currently generating about -0.09 per unit of risk. If you would invest 5,360 in SPDR Barclays Euro on August 30, 2024 and sell it today you would earn a total of 43.00 from holding SPDR Barclays Euro or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Euro vs. Centrale dAchat Franaise
Performance |
| Timeline |
| SPDR Barclays Euro |
| Centrale dAchat Franaise |
SPDR Barclays and Centrale DAchat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Centrale DAchat
The main advantage of trading using opposite SPDR Barclays and Centrale DAchat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Centrale DAchat 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 Centrale DAchat will offset losses from the drop in Centrale DAchat's long position.| SPDR Barclays vs. Manitou BF SA | SPDR Barclays vs. Ossiam Minimum Variance | SPDR Barclays vs. Ekinops SA | SPDR Barclays vs. Orapi SA |
| Centrale DAchat vs. Vente Unique | Centrale DAchat vs. Groupe Sfpi | Centrale DAchat vs. Cegedim SA | Centrale DAchat vs. SA Catana Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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