Correlation Between SSgA SPDR and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and Lyxor UCITS 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 Lyxor UCITS 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 Lyxor UCITS Japan, you can compare the effects of market volatilities on SSgA SPDR and Lyxor UCITS 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 Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and Lyxor UCITS.
Diversification Opportunities for SSgA SPDR and Lyxor UCITS
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SSgA and Lyxor is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Lyxor UCITS Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Japan 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 Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Japan has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Lyxor UCITS go up and down completely randomly.
Pair Corralation between SSgA SPDR and Lyxor UCITS
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 0.63 times more return on investment than Lyxor UCITS. However, SSgA SPDR ETFs is 1.58 times less risky than Lyxor UCITS. It trades about 0.11 of its potential returns per unit of risk. Lyxor UCITS Japan is currently generating about 0.02 per unit of risk. If you would invest 7,573 in SSgA SPDR ETFs on August 25, 2024 and sell it today you would earn a total of 1,512 from holding SSgA SPDR ETFs or generate 19.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. Lyxor UCITS Japan
Performance |
| Timeline |
| SSgA SPDR ETFs |
| Lyxor UCITS Japan |
SSgA SPDR and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and Lyxor UCITS
The main advantage of trading using opposite SSgA SPDR and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS's long position.| SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Stoxx | SSgA SPDR vs. Amundi CAC 40 |
| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Amundi Index Solutions | Lyxor UCITS vs. Amundi Index Solutions | Lyxor UCITS vs. Amundi Index Solutions |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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