Correlation Between LG Clean and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both LG Clean and SPDR FTSE 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 LG Clean and SPDR FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Clean Water and SPDR FTSE UK, you can compare the effects of market volatilities on LG Clean and SPDR FTSE 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 LG Clean with a short position of SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Clean and SPDR FTSE.
Diversification Opportunities for LG Clean and SPDR FTSE
Modest diversification
The 3 months correlation between GLUG and SPDR is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding LG Clean Water and SPDR FTSE UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE UK and LG Clean 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 LG Clean Water are associated (or correlated) with SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE UK has no effect on the direction of LG Clean i.e., LG Clean and SPDR FTSE go up and down completely randomly.
Pair Corralation between LG Clean and SPDR FTSE
Assuming the 90 days trading horizon LG Clean is expected to generate 1.03 times less return on investment than SPDR FTSE. In addition to that, LG Clean is 1.04 times more volatile than SPDR FTSE UK. It trades about 0.25 of its total potential returns per unit of risk. SPDR FTSE UK is currently generating about 0.27 per unit of volatility. If you would invest 609.00 in SPDR FTSE UK on October 29, 2024 and sell it today you would earn a total of 19.00 from holding SPDR FTSE UK or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
LG Clean Water vs. SPDR FTSE UK
Performance |
| Timeline |
| LG Clean Water |
| SPDR FTSE UK |
LG Clean and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Clean and SPDR FTSE
The main advantage of trading using opposite LG Clean and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Clean position performs unexpectedly, SPDR FTSE 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 SPDR FTSE will offset losses from the drop in SPDR FTSE's long position.| LG Clean vs. Vanguard FTSE Emerging | LG Clean vs. UBS ETF MSCI | LG Clean vs. VanEck Solana ETN | LG Clean vs. iShares Corp Bond |
| SPDR FTSE vs. UBSFund Solutions MSCI | SPDR FTSE vs. Vanguard SP 500 | SPDR FTSE vs. iShares VII PLC | SPDR FTSE vs. iShares Core SP |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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