Correlation Between SPDR MSCI and Multi Units
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and Multi Units 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 MSCI and Multi Units into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Europe and Multi Units France, you can compare the effects of market volatilities on SPDR MSCI and Multi Units 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 MSCI with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and Multi Units.
Diversification Opportunities for SPDR MSCI and Multi Units
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Multi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Europe and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France and SPDR MSCI 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 MSCI Europe are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and Multi Units go up and down completely randomly.
Pair Corralation between SPDR MSCI and Multi Units
Assuming the 90 days trading horizon SPDR MSCI Europe is expected to under-perform the Multi Units. In addition to that, SPDR MSCI is 1.12 times more volatile than Multi Units France. It trades about -0.11 of its total potential returns per unit of risk. Multi Units France is currently generating about 0.07 per unit of volatility. If you would invest 3,084 in Multi Units France on August 31, 2024 and sell it today you would earn a total of 44.00 from holding Multi Units France or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI Europe vs. Multi Units France
Performance |
| Timeline |
| SPDR MSCI Europe |
| Multi Units France |
SPDR MSCI and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and Multi Units
The main advantage of trading using opposite SPDR MSCI and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' long position.| SPDR MSCI vs. Multi Units France | SPDR MSCI vs. Lyxor MSCI China | SPDR MSCI vs. Lyxor Commodities RefinitivCoreCommodity | SPDR MSCI vs. Manitou BF SA |
| Multi Units vs. Lyxor MSCI China | Multi Units vs. Lyxor Commodities RefinitivCoreCommodity | Multi Units vs. Manitou BF SA | Multi Units 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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