Correlation Between Lyxor UCITS and SSgA SPDR

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and SSgA SPDR 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 Lyxor UCITS and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Japan and SSgA SPDR ETFs, you can compare the effects of market volatilities on Lyxor UCITS and SSgA SPDR 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 Lyxor UCITS with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and SSgA SPDR.

Diversification Opportunities for Lyxor UCITS and SSgA SPDR

0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Lyxor and SSgA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and Lyxor UCITS 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 Lyxor UCITS Japan are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and SSgA SPDR go up and down completely randomly.

Pair Corralation between Lyxor UCITS and SSgA SPDR

Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 1.89 times more return on investment than SSgA SPDR. However, Lyxor UCITS is 1.89 times more volatile than SSgA SPDR ETFs. It trades about 0.07 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.12 per unit of risk. If you would invest  16,876  in Lyxor UCITS Japan on September 12, 2024 and sell it today you would earn a total of  4,994  from holding Lyxor UCITS Japan or generate 29.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.11%
ValuesDaily Returns

Lyxor UCITS Japan  vs.  SSgA SPDR ETFs

 Performance 
       Timeline  
Lyxor UCITS Japan 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor UCITS Japan are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lyxor UCITS may actually be approaching a critical reversion point that can send shares even higher in January 2025.
SSgA SPDR ETFs 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR ETFs are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SSgA SPDR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lyxor UCITS and SSgA SPDR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lyxor UCITS and SSgA SPDR

The main advantage of trading using opposite Lyxor UCITS and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.
The idea behind Lyxor UCITS Japan and SSgA SPDR ETFs 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.
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

Other Complementary Tools

Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing