Correlation Between SPDR Bloomberg and TrimTabs Donoghue

Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and TrimTabs Donoghue 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 Bloomberg and TrimTabs Donoghue into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR Bloomberg Barclays and TrimTabs Donoghue Forlines, you can compare the effects of market volatilities on SPDR Bloomberg and TrimTabs Donoghue 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 Bloomberg with a short position of TrimTabs Donoghue. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and TrimTabs Donoghue.

Diversification Opportunities for SPDR Bloomberg and TrimTabs Donoghue

0.77

Correlation Coefficient

SPDR Bloomberg  TrimTabs Donoghue

Poor diversification

The 3 months correlation between SPDR and TrimTabs is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Barclays and TrimTabs Donoghue Forlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrimTabs Donoghue and SPDR Bloomberg 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 Bloomberg Barclays are associated (or correlated) with TrimTabs Donoghue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrimTabs Donoghue has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and TrimTabs Donoghue go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and TrimTabs Donoghue

Given the investment horizon of 90 days SPDR Bloomberg Barclays is expected to generate 1.71 times more return on investment than TrimTabs Donoghue. However, SPDR Bloomberg is 1.71 times more volatile than TrimTabs Donoghue Forlines. It trades about 0.06 of its potential returns per unit of risk. TrimTabs Donoghue Forlines is currently generating about 0.11 per unit of risk. If you would invest  2,298  in SPDR Bloomberg Barclays on September 12, 2024 and sell it today you would earn a total of  155.40  from holding SPDR Bloomberg Barclays or generate 6.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SPDR Bloomberg Barclays  vs.  TrimTabs Donoghue Forlines

SPDR Bloomberg Barclays

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Bloomberg Barclays has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, SPDR Bloomberg is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

TrimTabs Donoghue

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TrimTabs Donoghue Forlines are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, TrimTabs Donoghue is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Bloomberg and TrimTabs Donoghue

The main advantage of trading using opposite SPDR Bloomberg and TrimTabs Donoghue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, TrimTabs Donoghue 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 TrimTabs Donoghue will offset losses from the drop in TrimTabs Donoghue's long position.

The idea behind SPDR Bloomberg Barclays and TrimTabs Donoghue Forlines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.