Correlation Between Hydratec Industries and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Hydratec Industries and SPDR MSCI 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 Hydratec Industries and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydratec Industries NV and SPDR MSCI World, you can compare the effects of market volatilities on Hydratec Industries and SPDR MSCI 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 Hydratec Industries with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydratec Industries and SPDR MSCI.
Diversification Opportunities for Hydratec Industries and SPDR MSCI
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hydratec and SPDR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hydratec Industries NV and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World and Hydratec Industries 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 Hydratec Industries NV are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of Hydratec Industries i.e., Hydratec Industries and SPDR MSCI go up and down completely randomly.
Pair Corralation between Hydratec Industries and SPDR MSCI
Assuming the 90 days trading horizon Hydratec Industries is expected to generate 5.59 times less return on investment than SPDR MSCI. But when comparing it to its historical volatility, Hydratec Industries NV is 1.75 times less risky than SPDR MSCI. It trades about 0.05 of its potential returns per unit of risk. SPDR MSCI World is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 16,614 in SPDR MSCI World on September 12, 2024 and sell it today you would earn a total of 608.00 from holding SPDR MSCI World or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydratec Industries NV vs. SPDR MSCI World
Performance |
| Timeline |
| Hydratec Industries |
| SPDR MSCI World |
Hydratec Industries and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydratec Industries and SPDR MSCI
The main advantage of trading using opposite Hydratec Industries and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydratec Industries position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI's long position.| Hydratec Industries vs. Holland Colours NV | Hydratec Industries vs. NV Nederlandsche Apparatenfabriek | Hydratec Industries vs. Amsterdam Commodities NV | Hydratec Industries vs. TKH Group NV |
| SPDR MSCI vs. SPDR Dow Jones | SPDR MSCI vs. iShares Core MSCI | SPDR MSCI vs. iShares SP 500 | SPDR MSCI vs. Vanguard FTSE All World |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |