Correlation Between SPDR SP and Ossiam Shiller
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Ossiam Shiller 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 SPDR SP and Ossiam Shiller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Ossiam Shiller Barclays, you can compare the effects of market volatilities on SPDR SP and Ossiam Shiller 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 SPDR SP with a short position of Ossiam Shiller. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Ossiam Shiller.
Diversification Opportunities for SPDR SP and Ossiam Shiller
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Ossiam is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Ossiam Shiller Barclays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ossiam Shiller Barclays and SPDR SP 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 SPDR SP 500 are associated (or correlated) with Ossiam Shiller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ossiam Shiller Barclays has no effect on the direction of SPDR SP i.e., SPDR SP and Ossiam Shiller go up and down completely randomly.
Pair Corralation between SPDR SP and Ossiam Shiller
Assuming the 90 days trading horizon SPDR SP 500 is expected to generate 1.23 times more return on investment than Ossiam Shiller. However, SPDR SP is 1.23 times more volatile than Ossiam Shiller Barclays. It trades about 0.3 of its potential returns per unit of risk. Ossiam Shiller Barclays is currently generating about -0.22 per unit of risk. If you would invest 51,270 in SPDR SP 500 on August 27, 2024 and sell it today you would earn a total of 5,910 from holding SPDR SP 500 or generate 11.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. Ossiam Shiller Barclays
Performance |
| Timeline |
| SPDR SP 500 |
| Ossiam Shiller Barclays |
SPDR SP and Ossiam Shiller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Ossiam Shiller
The main advantage of trading using opposite SPDR SP and Ossiam Shiller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Ossiam Shiller 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 Ossiam Shiller will offset losses from the drop in Ossiam Shiller's long position.The idea behind SPDR SP 500 and Ossiam Shiller Barclays 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.| Ossiam Shiller vs. Lyxor UCITS Stoxx | Ossiam Shiller vs. Xtrackers MSCI Europe | Ossiam Shiller vs. SPDR SP 500 |
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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