Correlation Between SPDR SP and Mast Global
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Mast Global 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 SP and Mast Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Metals and Mast Global Battery, you can compare the effects of market volatilities on SPDR SP and Mast Global 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 SP with a short position of Mast Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Mast Global.
Diversification Opportunities for SPDR SP and Mast Global
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Mast is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Metals and Mast Global Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mast Global Battery and SPDR SP 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 SP Metals are associated (or correlated) with Mast Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mast Global Battery has no effect on the direction of SPDR SP i.e., SPDR SP and Mast Global go up and down completely randomly.
Pair Corralation between SPDR SP and Mast Global
Considering the 90-day investment horizon SPDR SP Metals is expected to generate 1.21 times more return on investment than Mast Global. However, SPDR SP is 1.21 times more volatile than Mast Global Battery. It trades about 0.04 of its potential returns per unit of risk. Mast Global Battery is currently generating about 0.0 per unit of risk. If you would invest 5,137 in SPDR SP Metals on August 29, 2024 and sell it today you would earn a total of 1,706 from holding SPDR SP Metals or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.58% |
| Values | Daily Returns |
SPDR SP Metals vs. Mast Global Battery
Performance |
| Timeline |
| SPDR SP Metals |
| Mast Global Battery |
SPDR SP and Mast Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Mast Global
The main advantage of trading using opposite SPDR SP and Mast Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Mast Global 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 Mast Global will offset losses from the drop in Mast Global's long position.| SPDR SP vs. Materials Select Sector | SPDR SP vs. SPDR SP Oil | SPDR SP vs. SPDR SP Retail | SPDR SP vs. SPDR SP Homebuilders |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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