Correlation Between Multi Units and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Multi Units 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 Multi Units and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units France and SPDR MSCI Europe, you can compare the effects of market volatilities on Multi Units 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 Multi Units with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and SPDR MSCI.
Diversification Opportunities for Multi Units and SPDR MSCI
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and SPDR is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units France and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe and Multi Units 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 Multi Units France 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 Europe has no effect on the direction of Multi Units i.e., Multi Units and SPDR MSCI go up and down completely randomly.
Pair Corralation between Multi Units and SPDR MSCI
Assuming the 90 days trading horizon Multi Units France is expected to generate 1.21 times more return on investment than SPDR MSCI. However, Multi Units is 1.21 times more volatile than SPDR MSCI Europe. It trades about -0.03 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about -0.05 per unit of risk. If you would invest 3,224 in Multi Units France on September 2, 2024 and sell it today you would lose (69.00) from holding Multi Units France or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Units France vs. SPDR MSCI Europe
Performance |
| Timeline |
| Multi Units France |
| SPDR MSCI Europe |
Multi Units and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and SPDR MSCI
The main advantage of trading using opposite Multi Units and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units 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.| Multi Units vs. Lyxor MSCI China | Multi Units vs. Lyxor MSCI Brazil | Multi Units vs. MULTI UNITS LUXEMBOURG | Multi Units vs. Multi Units France |
| SPDR MSCI vs. SPDR MSCI Europe | SPDR MSCI vs. SPDR Barclays Cap | SPDR MSCI vs. SPDR SP 500 | SPDR MSCI vs. SPDR MSCI Europe |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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