Correlation Between CS Real and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both CS Real and SPDR Dow 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 CS Real and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CS Real Estate and SPDR Dow Jones, you can compare the effects of market volatilities on CS Real and SPDR Dow 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 CS Real with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of CS Real and SPDR Dow.
Diversification Opportunities for CS Real and SPDR Dow
Significant diversification
The 3 months correlation between HOSP and SPDR is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CS Real Estate and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and CS Real 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 CS Real Estate are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of CS Real i.e., CS Real and SPDR Dow go up and down completely randomly.
Pair Corralation between CS Real and SPDR Dow
Assuming the 90 days trading horizon CS Real Estate is expected to generate 1.4 times more return on investment than SPDR Dow. However, CS Real is 1.4 times more volatile than SPDR Dow Jones. It trades about 0.31 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about -0.21 per unit of risk. If you would invest 9,700 in CS Real Estate on September 22, 2024 and sell it today you would earn a total of 800.00 from holding CS Real Estate or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CS Real Estate vs. SPDR Dow Jones
Performance |
| Timeline |
| CS Real Estate |
| SPDR Dow Jones |
CS Real and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CS Real and SPDR Dow
The main advantage of trading using opposite CS Real and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CS Real position performs unexpectedly, SPDR Dow 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 Dow will offset losses from the drop in SPDR Dow's long position.| CS Real vs. SPDR Dow Jones | CS Real vs. Baloise Holding AG | CS Real vs. SPDR FTSE UK | CS Real vs. Banque Cantonale du |
| SPDR Dow vs. UBSFund Solutions MSCI | SPDR Dow vs. Vanguard SP 500 | SPDR Dow vs. iShares VII PLC | SPDR Dow 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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