Correlation Between Perella Weinberg and SPDR BOFA
Can any of the company-specific risk be diversified away by investing in both Perella Weinberg and SPDR BOFA 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 Perella Weinberg and SPDR BOFA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perella Weinberg Partners and SPDR BOFA MERRILL, you can compare the effects of market volatilities on Perella Weinberg and SPDR BOFA 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 Perella Weinberg with a short position of SPDR BOFA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perella Weinberg and SPDR BOFA.
Diversification Opportunities for Perella Weinberg and SPDR BOFA
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Perella and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Perella Weinberg Partners and SPDR BOFA MERRILL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR BOFA MERRILL and Perella Weinberg 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 Perella Weinberg Partners are associated (or correlated) with SPDR BOFA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR BOFA MERRILL has no effect on the direction of Perella Weinberg i.e., Perella Weinberg and SPDR BOFA go up and down completely randomly.
Pair Corralation between Perella Weinberg and SPDR BOFA
Considering the 90-day investment horizon Perella Weinberg Partners is expected to generate 2.58 times more return on investment than SPDR BOFA. However, Perella Weinberg is 2.58 times more volatile than SPDR BOFA MERRILL. It trades about 0.24 of its potential returns per unit of risk. SPDR BOFA MERRILL is currently generating about 0.23 per unit of risk. If you would invest 2,053 in Perella Weinberg Partners on August 30, 2024 and sell it today you would earn a total of 487.00 from holding Perella Weinberg Partners or generate 23.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perella Weinberg Partners vs. SPDR BOFA MERRILL
Performance |
| Timeline |
| Perella Weinberg Partners |
| SPDR BOFA MERRILL |
Perella Weinberg and SPDR BOFA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perella Weinberg and SPDR BOFA
The main advantage of trading using opposite Perella Weinberg and SPDR BOFA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perella Weinberg position performs unexpectedly, SPDR BOFA 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 BOFA will offset losses from the drop in SPDR BOFA's long position.| Perella Weinberg vs. Evercore Partners | Perella Weinberg vs. Lazard | Perella Weinberg vs. Piper Sandler Companies | Perella Weinberg vs. Moelis Co |
| SPDR BOFA vs. Invesco Actively Managed | SPDR BOFA vs. iShares Trust | SPDR BOFA vs. Xtrackers MSCI Emerging | SPDR BOFA vs. iShares MSCI Emerging |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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