Correlation Between SPDR Morgan and XWEB
Can any of the company-specific risk be diversified away by investing in both SPDR Morgan and XWEB 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 Morgan and XWEB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Morgan Stanley and XWEB, you can compare the effects of market volatilities on SPDR Morgan and XWEB 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 Morgan with a short position of XWEB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Morgan and XWEB.
Diversification Opportunities for SPDR Morgan and XWEB
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and XWEB is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Morgan Stanley and XWEB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XWEB and SPDR Morgan 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 Morgan Stanley are associated (or correlated) with XWEB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XWEB has no effect on the direction of SPDR Morgan i.e., SPDR Morgan and XWEB go up and down completely randomly.
Pair Corralation between SPDR Morgan and XWEB
If you would invest 20,021 in SPDR Morgan Stanley on August 26, 2024 and sell it today you would earn a total of 475.00 from holding SPDR Morgan Stanley or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
SPDR Morgan Stanley vs. XWEB
Performance |
| Timeline |
| SPDR Morgan Stanley |
| XWEB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR Morgan and XWEB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Morgan and XWEB
The main advantage of trading using opposite SPDR Morgan and XWEB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Morgan position performs unexpectedly, XWEB 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 XWEB will offset losses from the drop in XWEB's long position.| SPDR Morgan vs. SPDR FactSet Innovative | SPDR Morgan vs. SPDR SP Software | SPDR Morgan vs. SPDR SP Health | SPDR Morgan vs. iShares Expanded Tech |
| XWEB vs. SPDR FactSet Innovative | XWEB vs. SPDR SP Software | XWEB vs. SPDR Morgan Stanley | XWEB vs. SPDR SP Health |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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