Correlation Between SPDR Barclays and Orapi SA
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Orapi SA 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 Orapi SA 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 Orapi SA, you can compare the effects of market volatilities on SPDR Barclays and Orapi SA 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 Orapi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Orapi SA.
Diversification Opportunities for SPDR Barclays and Orapi SA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Orapi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Euro and Orapi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orapi SA 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 Orapi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orapi SA has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Orapi SA go up and down completely randomly.
Pair Corralation between SPDR Barclays and Orapi SA
Assuming the 90 days trading horizon SPDR Barclays is expected to generate 3.96 times less return on investment than Orapi SA. But when comparing it to its historical volatility, SPDR Barclays Euro is 1.46 times less risky than Orapi SA. It trades about 0.01 of its potential returns per unit of risk. Orapi SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Orapi SA on August 26, 2024 and sell it today you would earn a total of 147.00 from holding Orapi SA or generate 29.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.83% |
| Values | Daily Returns |
SPDR Barclays Euro vs. Orapi SA
Performance |
| Timeline |
| SPDR Barclays Euro |
| Orapi SA |
SPDR Barclays and Orapi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Orapi SA
The main advantage of trading using opposite SPDR Barclays and Orapi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Orapi SA 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 Orapi SA will offset losses from the drop in Orapi SA's long position.| SPDR Barclays vs. Lyxor UCITS Japan | SPDR Barclays vs. Lyxor UCITS Japan | SPDR Barclays vs. Lyxor UCITS Stoxx | SPDR Barclays vs. Amundi CAC 40 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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