Correlation Between ETF Securities and SPDR Morgan

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

By analyzing existing cross correlation between ETF Securities and SPDR Morgan Stanley, you can compare the effects of market volatilities on ETF Securities and SPDR Morgan 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 ETF Securities with a short position of SPDR Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Securities and SPDR Morgan.

Diversification Opportunities for ETF Securities and SPDR Morgan

0.0

Correlation Coefficient

ETF Securities  SPDR Morgan

Pay attention - limited upside

The 3 months correlation between ETF and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ETF Securities and SPDR Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Morgan Stanley and ETF Securities 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 ETF Securities are associated (or correlated) with SPDR Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Morgan Stanley has no effect on the direction of ETF Securities i.e., ETF Securities and SPDR Morgan go up and down completely randomly.

Pair Corralation between ETF Securities and SPDR Morgan

If you would invest  17,543  in SPDR Morgan Stanley on February 18, 2024 and sell it today you would earn a total of  886.00  from holding SPDR Morgan Stanley or generate 5.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ETF Securities  vs.  SPDR Morgan Stanley

ETF Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETF Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, ETF Securities is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

SPDR Morgan Stanley

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Morgan Stanley are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SPDR Morgan 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 ETF Securities and SPDR Morgan

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

The idea behind ETF Securities and SPDR Morgan Stanley 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.