Correlation Between SPTSX Dividend and Upstart Investments

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Apply Can any of the company-specific risk be diversified away by investing in both SPTSX Dividend and Upstart Investments 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 SPTSX Dividend and Upstart Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

Diversification Opportunities for SPTSX Dividend and Upstart Investments

Pair Corralation between SPTSX Dividend and Upstart Investments

SPTSX Dividend Aristocrats  vs.  Upstart Investments

Pair Trading with SPTSX Dividend and Upstart Investments

The main advantage of trading using opposite SPTSX Dividend and Upstart Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, Upstart Investments 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 Upstart Investments will offset losses from the drop in Upstart Investments' long position.The idea behind SPTSX Dividend Aristocrats and Upstart Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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