Correlation Between Multi Units and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Multi Units and SSgA SPDR 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 Multi Units and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units Luxembourg and SSgA SPDR ETFs, you can compare the effects of market volatilities on Multi Units and SSgA SPDR 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 Multi Units with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and SSgA SPDR.
Diversification Opportunities for Multi Units and SSgA SPDR
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi and SSgA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and Multi Units 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 Multi Units Luxembourg are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Multi Units i.e., Multi Units and SSgA SPDR go up and down completely randomly.
Pair Corralation between Multi Units and SSgA SPDR
Assuming the 90 days trading horizon Multi Units Luxembourg is expected to generate 1.0 times more return on investment than SSgA SPDR. However, Multi Units is 1.0 times more volatile than SSgA SPDR ETFs. It trades about 0.1 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.05 per unit of risk. If you would invest 46,102 in Multi Units Luxembourg on August 25, 2024 and sell it today you would earn a total of 40,215 from holding Multi Units Luxembourg or generate 87.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Units Luxembourg vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Multi Units Luxembourg |
| SSgA SPDR ETFs |
Multi Units and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and SSgA SPDR
The main advantage of trading using opposite Multi Units and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.| Multi Units vs. Lyxor UCITS Japan | Multi Units vs. Lyxor UCITS Japan | Multi Units vs. Lyxor UCITS Stoxx | Multi Units vs. Amundi CAC 40 |
| SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Stoxx | SSgA SPDR vs. Amundi CAC 40 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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