Correlation Between SSgA SPDR and Orapi SA
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and Orapi SA 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 SSgA SPDR and Orapi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSgA SPDR ETFs and Orapi SA, you can compare the effects of market volatilities on SSgA SPDR and Orapi SA 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 SSgA SPDR with a short position of Orapi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and Orapi SA.
Diversification Opportunities for SSgA SPDR and Orapi SA
Very good diversification
The 3 months correlation between SSgA and Orapi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Orapi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orapi SA and SSgA SPDR 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 SSgA SPDR ETFs are associated (or correlated) with Orapi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orapi SA has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Orapi SA go up and down completely randomly.
Pair Corralation between SSgA SPDR and Orapi SA
Assuming the 90 days trading horizon SSgA SPDR is expected to generate 1.17 times less return on investment than Orapi SA. But when comparing it to its historical volatility, SSgA SPDR ETFs is 3.39 times less risky than Orapi SA. It trades about 0.03 of its potential returns per unit of risk. Orapi SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Orapi SA on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Orapi SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. Orapi SA
Performance |
| Timeline |
| SSgA SPDR ETFs |
| Orapi SA |
SSgA SPDR and Orapi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and Orapi SA
The main advantage of trading using opposite SSgA SPDR and Orapi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, Orapi SA 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 Orapi SA will offset losses from the drop in Orapi SA's long position.| SSgA SPDR vs. Amundi Index Solutions | SSgA SPDR vs. Amundi Index Solutions | SSgA SPDR vs. Manitou BF SA | SSgA SPDR vs. Ossiam Minimum Variance |
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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