Correlation Between Promotora and SPDR Series
Can any of the company-specific risk be diversified away by investing in both Promotora and SPDR Series 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 Promotora and SPDR Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promotora y Operadora and SPDR Series Trust, you can compare the effects of market volatilities on Promotora and SPDR Series 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 Promotora with a short position of SPDR Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and SPDR Series.
Diversification Opportunities for Promotora and SPDR Series
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Promotora and SPDR is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora and SPDR Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Series Trust and Promotora 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 Promotora y Operadora are associated (or correlated) with SPDR Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Series Trust has no effect on the direction of Promotora i.e., Promotora and SPDR Series go up and down completely randomly.
Pair Corralation between Promotora and SPDR Series
Assuming the 90 days trading horizon Promotora y Operadora is expected to generate 2.13 times more return on investment than SPDR Series. However, Promotora is 2.13 times more volatile than SPDR Series Trust. It trades about 0.13 of its potential returns per unit of risk. SPDR Series Trust is currently generating about -0.15 per unit of risk. If you would invest 20,064 in Promotora y Operadora on January 18, 2025 and sell it today you would earn a total of 2,193 from holding Promotora y Operadora or generate 10.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Promotora y Operadora vs. SPDR Series Trust
Performance |
| Timeline |
| Promotora y Operadora |
| SPDR Series Trust |
Promotora and SPDR Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and SPDR Series
The main advantage of trading using opposite Promotora and SPDR Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora position performs unexpectedly, SPDR Series 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 Series will offset losses from the drop in SPDR Series' long position.| Promotora vs. Gruma SAB de | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del |
| SPDR Series vs. SPDR Dow Jones | SPDR Series vs. SPDR Gold Trust | SPDR Series vs. SPDR Series Trust | SPDR Series vs. SPDR Series Trust |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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