Correlation Between SSgA SPDR and Multi Units
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and Multi Units 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 Multi Units 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 Multi Units France, you can compare the effects of market volatilities on SSgA SPDR and Multi Units 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 Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and Multi Units.
Diversification Opportunities for SSgA SPDR and Multi Units
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SSgA and Multi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France 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 Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Multi Units go up and down completely randomly.
Pair Corralation between SSgA SPDR and Multi Units
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to under-perform the Multi Units. But the etf apears to be less risky and, when comparing its historical volatility, SSgA SPDR ETFs is 1.29 times less risky than Multi Units. The etf trades about -0.03 of its potential returns per unit of risk. The Multi Units France is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,068 in Multi Units France on September 1, 2024 and sell it today you would earn a total of 87.00 from holding Multi Units France or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. Multi Units France
Performance |
| Timeline |
| SSgA SPDR ETFs |
| Multi Units France |
SSgA SPDR and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and Multi Units
The main advantage of trading using opposite SSgA SPDR and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' long position.| SSgA SPDR vs. Multi Units France | SSgA SPDR vs. Lyxor MSCI China | SSgA SPDR vs. Lyxor Commodities RefinitivCoreCommodity | SSgA SPDR vs. Manitou BF SA |
| Multi Units vs. Lyxor MSCI China | Multi Units vs. Lyxor Commodities RefinitivCoreCommodity | Multi Units vs. Manitou BF SA | Multi Units vs. Ossiam Minimum Variance |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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