Correlation Between SPASX Dividend and BEL Small
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and BEL Small 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 SPASX Dividend and BEL Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX Dividend Opportunities and BEL Small, you can compare the effects of market volatilities on SPASX Dividend and BEL Small 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 SPASX Dividend with a short position of BEL Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and BEL Small.
Diversification Opportunities for SPASX Dividend and BEL Small
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPASX and BEL is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and BEL Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEL Small and SPASX Dividend 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 SPASX Dividend Opportunities are associated (or correlated) with BEL Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEL Small has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and BEL Small go up and down completely randomly.
Pair Corralation between SPASX Dividend and BEL Small
Assuming the 90 days trading horizon SPASX Dividend Opportunities is expected to generate 1.2 times more return on investment than BEL Small. However, SPASX Dividend is 1.2 times more volatile than BEL Small. It trades about 0.03 of its potential returns per unit of risk. BEL Small is currently generating about -0.18 per unit of risk. If you would invest 165,760 in SPASX Dividend Opportunities on September 1, 2024 and sell it today you would earn a total of 3,930 from holding SPASX Dividend Opportunities or generate 2.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.23% |
Values | Daily Returns |
SPASX Dividend Opportunities vs. BEL Small
Performance |
Timeline |
SPASX Dividend and BEL Small Volatility Contrast
Predicted Return Density |
Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
BEL Small
Pair trading matchups for BEL Small
Pair Trading with SPASX Dividend and BEL Small
The main advantage of trading using opposite SPASX Dividend and BEL Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, BEL Small 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 BEL Small will offset losses from the drop in BEL Small's long position.SPASX Dividend vs. BKI Investment | SPASX Dividend vs. Diversified United Investment | SPASX Dividend vs. Ainsworth Game Technology | SPASX Dividend vs. Bio Gene Technology |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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