Correlation Between MORE and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both MORE 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 MORE and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MORE and SPDR Dow Jones, you can compare the effects of market volatilities on MORE 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 MORE with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of MORE and SPDR Dow.
Diversification Opportunities for MORE and SPDR Dow
Pay attention - limited upside
The 3 months correlation between MORE and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MORE 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 MORE 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 MORE 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 MORE i.e., MORE and SPDR Dow go up and down completely randomly.
Pair Corralation between MORE and SPDR Dow
Given the investment horizon of 90 days MORE is expected to under-perform the SPDR Dow. But the etf apears to be less risky and, when comparing its historical volatility, MORE is 1.0 times less risky than SPDR Dow. The etf trades about -0.02 of its potential returns per unit of risk. The SPDR Dow Jones is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,958 in SPDR Dow Jones on November 2, 2024 and sell it today you would earn a total of 1,019 from holding SPDR Dow Jones or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.47% |
| Values | Daily Returns |
MORE vs. SPDR Dow Jones
Performance |
| Timeline |
| MORE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPDR Dow Jones |
MORE and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MORE and SPDR Dow
The main advantage of trading using opposite MORE and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MORE 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.| MORE vs. Xenia Hotels Resorts | MORE vs. Forestar Group | MORE vs. Nexpoint Residential Trust | MORE vs. Urban Edge Properties |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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