Correlation Between SPDR Barclays and Multi Units

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

By analyzing existing cross correlation between SPDR Barclays 10 and Multi Units France, you can compare the effects of market volatilities on SPDR Barclays and Multi Units 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 Barclays with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Multi Units.

Diversification Opportunities for SPDR Barclays and Multi Units

-0.42

Correlation Coefficient

SPDR Barclays  Multi Units

Very good diversification

The 3 months correlation between SPDR and Multi is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays 10 and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France and SPDR Barclays 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 Barclays 10 are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Multi Units go up and down completely randomly.

Pair Corralation between SPDR Barclays and Multi Units

Assuming the 90 days trading horizon SPDR Barclays 10 is expected to under-perform the Multi Units. In addition to that, SPDR Barclays is 1.08 times more volatile than Multi Units France. It trades about -0.08 of its total potential returns per unit of risk. Multi Units France is currently generating about 0.04 per unit of volatility. If you would invest  17,546  in Multi Units France on September 5, 2024 and sell it today you would earn a total of  332.00  from holding Multi Units France or generate 1.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SPDR Barclays 10  vs.  Multi Units France

SPDR Barclays 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Barclays 10 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SPDR Barclays is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Multi Units France

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Units France are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Multi Units is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SPDR Barclays and Multi Units

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

The idea behind SPDR Barclays 10 and Multi Units France 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.