Correlation Between SPDR Series and FibraHotel
Can any of the company-specific risk be diversified away by investing in both SPDR Series and FibraHotel 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 Series and FibraHotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Series Trust and FibraHotel, you can compare the effects of market volatilities on SPDR Series and FibraHotel 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 Series with a short position of FibraHotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and FibraHotel.
Diversification Opportunities for SPDR Series and FibraHotel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPDR and FibraHotel is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and FibraHotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibraHotel and SPDR Series 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 Series Trust are associated (or correlated) with FibraHotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibraHotel has no effect on the direction of SPDR Series i.e., SPDR Series and FibraHotel go up and down completely randomly.
Pair Corralation between SPDR Series and FibraHotel
Assuming the 90 days trading horizon SPDR Series Trust is expected to generate 0.5 times more return on investment than FibraHotel. However, SPDR Series Trust is 2.01 times less risky than FibraHotel. It trades about 0.09 of its potential returns per unit of risk. FibraHotel is currently generating about 0.02 per unit of risk. If you would invest 256,547 in SPDR Series Trust on September 1, 2024 and sell it today you would earn a total of 44,553 from holding SPDR Series Trust or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Series Trust vs. FibraHotel
Performance |
| Timeline |
| SPDR Series Trust |
| FibraHotel |
SPDR Series and FibraHotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and FibraHotel
The main advantage of trading using opposite SPDR Series and FibraHotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series position performs unexpectedly, FibraHotel 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 FibraHotel will offset losses from the drop in FibraHotel's long position.| SPDR Series vs. Promotora y Operadora | SPDR Series vs. UnitedHealth Group Incorporated | SPDR Series vs. Qulitas Controladora SAB | SPDR Series vs. Hoteles City Express |
| FibraHotel vs. GMxico Transportes SAB | FibraHotel vs. Samsung Electronics Co | FibraHotel vs. Micron Technology | FibraHotel vs. CVS 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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