Correlation Between ALPEK SAB and SPDR Series

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

By analyzing existing cross correlation between ALPEK SAB de and SPDR Series Trust, you can compare the effects of market volatilities on ALPEK SAB and SPDR Series 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 ALPEK SAB with a short position of SPDR Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALPEK SAB and SPDR Series.

Diversification Opportunities for ALPEK SAB and SPDR Series

0.51

Correlation Coefficient

ALPEK SAB  SPDR Series

Very weak diversification

The 3 months correlation between ALPEK and SPDR is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ALPEK SAB de and SPDR Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Series Trust and ALPEK SAB 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 ALPEK SAB de are associated (or correlated) with SPDR Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Series Trust has no effect on the direction of ALPEK SAB i.e., ALPEK SAB and SPDR Series go up and down completely randomly.

Pair Corralation between ALPEK SAB and SPDR Series

Assuming the 90 days trading horizon ALPEK SAB de is expected to under-perform the SPDR Series. In addition to that, ALPEK SAB is 1.54 times more volatile than SPDR Series Trust. It trades about -0.07 of its total potential returns per unit of risk. SPDR Series Trust is currently generating about 0.01 per unit of volatility. If you would invest  262,670  in SPDR Series Trust on December 20, 2024 and sell it today you would earn a total of  830.00  from holding SPDR Series Trust or generate 0.32% return on investment over 90 days.

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

ALPEK SAB de  vs.  SPDR Series Trust

ALPEK SAB de

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALPEK SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SPDR Series Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Series Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SPDR Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ALPEK SAB and SPDR Series

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

The idea behind ALPEK SAB de and SPDR Series Trust 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.