Correlation Between UST Inc and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both UST Inc 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 UST Inc and SPDR MSCI 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 SPDR MSCI Europe, you can compare the effects of market volatilities on UST Inc 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 UST Inc with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UST Inc and SPDR MSCI.
Diversification Opportunities for UST Inc and SPDR MSCI
Pay attention - limited upside
The 3 months correlation between UST and SPDR is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe and UST Inc 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 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 Europe has no effect on the direction of UST Inc i.e., UST Inc and SPDR MSCI go up and down completely randomly.
Pair Corralation between UST Inc and SPDR MSCI
Assuming the 90 days trading horizon Multi Units Luxembourg is expected to generate 1.12 times more return on investment than SPDR MSCI. However, UST Inc is 1.12 times more volatile than SPDR MSCI Europe. It trades about 0.2 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about -0.14 per unit of risk. If you would invest 7,246 in Multi Units Luxembourg on August 30, 2024 and sell it today you would earn a total of 665.00 from holding Multi Units Luxembourg or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Units Luxembourg vs. SPDR MSCI Europe
Performance |
| Timeline |
| Multi Units Luxembourg |
| SPDR MSCI Europe |
UST Inc and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UST Inc and SPDR MSCI
The main advantage of trading using opposite UST Inc and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UST Inc 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.| UST Inc vs. Manitou BF SA | UST Inc vs. Ossiam Minimum Variance | UST Inc vs. Ekinops SA | UST Inc vs. Orapi SA |
| SPDR MSCI vs. Manitou BF SA | SPDR MSCI vs. Ossiam Minimum Variance | SPDR MSCI vs. Ekinops SA | SPDR MSCI vs. Orapi SA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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