Correlation Between SPDR SP and UOL Group

Specify exactly 2 symbols:
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

0.22
  Correlation Coefficient

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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

SPDR SP Metals  vs.  UOL Group Ltd

 Performance 
       Timeline  
SPDR SP Metals 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days SPDR SP Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, SPDR SP is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
UOL Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days UOL Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.
The idea behind SPDR SP Metals and UOL Group 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.
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.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Global Correlations
Find global opportunities by holding instruments from different markets
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Stocks Directory
Find actively traded stocks across global markets
Transaction History
View history of all your transactions and understand their impact on performance
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities