Correlation Between SPDR SP and UOL Group
Can any of the company-specific risk be diversified away by investing in both SPDR SP and UOL Group 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 SP and UOL Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Metals and UOL Group, you can compare the effects of market volatilities on SPDR SP and UOL Group 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 SP with a short position of UOL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and UOL Group.
Diversification Opportunities for SPDR SP and UOL Group
Modest diversification
The 3 months correlation between SPDR and UOL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Metals and UOL Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UOL Group and SPDR SP 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 SP Metals are associated (or correlated) with UOL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UOL Group has no effect on the direction of SPDR SP i.e., SPDR SP and UOL Group go up and down completely randomly.
Pair Corralation between SPDR SP and UOL Group
Considering the 90-day investment horizon SPDR SP Metals is expected to generate 0.89 times more return on investment than UOL Group. However, SPDR SP Metals is 1.12 times less risky than UOL Group. It trades about 0.14 of its potential returns per unit of risk. UOL Group is currently generating about -0.1 per unit of risk. If you would invest 5,693 in SPDR SP Metals on December 29, 2023 and sell it today you would earn a total of 263.00 from holding SPDR SP Metals or generate 4.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
SPDR SP Metals vs. UOL Group Ltd
Performance |
Timeline |
SPDR SP Metals |
UOL Group |
SPDR SP and UOL Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR SP and UOL Group
The main advantage of trading using opposite SPDR SP and UOL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, UOL Group 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 UOL Group will offset losses from the drop in UOL Group's long position.SPDR SP vs. Direxion Daily Gold | SPDR SP vs. SPDR SP North | SPDR SP vs. Direxion Daily Gold | SPDR SP vs. IShares Global Timber |
UOL Group vs. Eastern Co | UOL Group vs. World Houseware Limited | UOL Group vs. Mannatech Incorporated | UOL Group vs. Inter Parfums |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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