Correlation Between Main Thematic and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Main Thematic and SPDR MSCI 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 Main Thematic and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Thematic Innovation and SPDR MSCI USA, you can compare the effects of market volatilities on Main Thematic and SPDR MSCI 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 Main Thematic with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Thematic and SPDR MSCI.
Diversification Opportunities for Main Thematic and SPDR MSCI
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Main and SPDR is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Main Thematic Innovation and SPDR MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI USA and Main Thematic 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 Main Thematic Innovation are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI USA has no effect on the direction of Main Thematic i.e., Main Thematic and SPDR MSCI go up and down completely randomly.
Pair Corralation between Main Thematic and SPDR MSCI
Given the investment horizon of 90 days Main Thematic Innovation is expected to generate 2.13 times more return on investment than SPDR MSCI. However, Main Thematic is 2.13 times more volatile than SPDR MSCI USA. It trades about 0.4 of its potential returns per unit of risk. SPDR MSCI USA is currently generating about 0.2 per unit of risk. If you would invest 1,860 in Main Thematic Innovation on August 29, 2024 and sell it today you would earn a total of 287.00 from holding Main Thematic Innovation or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Thematic Innovation vs. SPDR MSCI USA
Performance |
| Timeline |
| Main Thematic Innovation |
| SPDR MSCI USA |
Main Thematic and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Thematic and SPDR MSCI
The main advantage of trading using opposite Main Thematic and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Thematic position performs unexpectedly, SPDR MSCI 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| Main Thematic vs. Global X Conscious | Main Thematic vs. Global X SP | Main Thematic vs. Global X Millennials | Main Thematic vs. Global X MSCI |
| SPDR MSCI vs. SPDR SSGA Large | SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR Russell 1000 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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