Correlation Between STRATSSM Certificates and STRATS SM
Can any of the company-specific risk be diversified away by investing in both STRATSSM Certificates and STRATS SM 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 STRATSSM Certificates and STRATS SM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRATSSM Certificates series and STRATS SM Trust, you can compare the effects of market volatilities on STRATSSM Certificates and STRATS SM 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 STRATSSM Certificates with a short position of STRATS SM. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRATSSM Certificates and STRATS SM.
Diversification Opportunities for STRATSSM Certificates and STRATS SM
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STRATSSM and STRATS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STRATSSM Certificates series and STRATS SM Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATS SM Trust and STRATSSM Certificates 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 STRATSSM Certificates series are associated (or correlated) with STRATS SM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATS SM Trust has no effect on the direction of STRATSSM Certificates i.e., STRATSSM Certificates and STRATS SM go up and down completely randomly.
Pair Corralation between STRATSSM Certificates and STRATS SM
Considering the 90-day investment horizon STRATSSM Certificates series is expected to generate 0.28 times more return on investment than STRATS SM. However, STRATSSM Certificates series is 3.55 times less risky than STRATS SM. It trades about 0.3 of its potential returns per unit of risk. STRATS SM Trust is currently generating about -0.01 per unit of risk. If you would invest 2,259 in STRATSSM Certificates series on November 2, 2024 and sell it today you would earn a total of 45.00 from holding STRATSSM Certificates series or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
STRATSSM Certificates series vs. STRATS SM Trust
Performance |
| Timeline |
| STRATSSM Certificates |
| STRATS SM Trust |
STRATSSM Certificates and STRATS SM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRATSSM Certificates and STRATS SM
The main advantage of trading using opposite STRATSSM Certificates and STRATS SM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRATSSM Certificates position performs unexpectedly, STRATS SM 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 STRATS SM will offset losses from the drop in STRATS SM's long position.| STRATSSM Certificates vs. STRATS SM Trust | STRATSSM Certificates vs. Strats SM Trust | STRATSSM Certificates vs. STRATS SM Trust | STRATSSM Certificates vs. Strats SM Trust |
| STRATS SM vs. STRATS SM Trust | STRATS SM vs. Strats SM Trust | STRATS SM vs. STRATSSM Certificates series | STRATS SM vs. Strats SM Trust |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |