Correlation Between DBA Sempra and Structured Products
Can any of the company-specific risk be diversified away by investing in both DBA Sempra and Structured Products 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 DBA Sempra and Structured Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBA Sempra 5750 and Structured Products Corp, you can compare the effects of market volatilities on DBA Sempra and Structured Products 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 DBA Sempra with a short position of Structured Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBA Sempra and Structured Products.
Diversification Opportunities for DBA Sempra and Structured Products
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DBA and Structured is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding DBA Sempra 5750 and Structured Products Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Structured Products Corp and DBA Sempra 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 DBA Sempra 5750 are associated (or correlated) with Structured Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Structured Products Corp has no effect on the direction of DBA Sempra i.e., DBA Sempra and Structured Products go up and down completely randomly.
Pair Corralation between DBA Sempra and Structured Products
Given the investment horizon of 90 days DBA Sempra 5750 is expected to under-perform the Structured Products. But the stock apears to be less risky and, when comparing its historical volatility, DBA Sempra 5750 is 2.25 times less risky than Structured Products. The stock trades about -0.23 of its potential returns per unit of risk. The Structured Products Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,883 in Structured Products Corp on August 26, 2024 and sell it today you would earn a total of 11.00 from holding Structured Products Corp or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBA Sempra 5750 vs. Structured Products Corp
Performance |
| Timeline |
| DBA Sempra 5750 |
| Structured Products Corp |
DBA Sempra and Structured Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBA Sempra and Structured Products
The main advantage of trading using opposite DBA Sempra and Structured Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBA Sempra position performs unexpectedly, Structured Products 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 Structured Products will offset losses from the drop in Structured Products' long position.| DBA Sempra vs. Southern Co | DBA Sempra vs. CMS Energy Corp | DBA Sempra vs. Affiliated Managers Group | DBA Sempra vs. Southern Co |
| Structured Products vs. DBA Sempra 5750 | Structured Products vs. CMS Energy Corp | Structured Products vs. American Financial Group | Structured Products vs. Maiden Holdings North |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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