Correlation Between SPDR Bloomberg and Strategy Shares

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

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

Diversification Opportunities for SPDR Bloomberg and Strategy Shares

0.92

Correlation Coefficient

SPDR Bloomberg  Strategy Shares

Almost no diversification

The 3 months correlation between SPDR and Strategy is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Barclays and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares and SPDR Bloomberg 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 Bloomberg Barclays are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and Strategy Shares go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and Strategy Shares

Given the investment horizon of 90 days SPDR Bloomberg Barclays is expected to generate 1.36 times more return on investment than Strategy Shares. However, SPDR Bloomberg is 1.36 times more volatile than Strategy Shares . It trades about 0.06 of its potential returns per unit of risk. Strategy Shares is currently generating about 0.03 per unit of risk. If you would invest  2,107  in SPDR Bloomberg Barclays on September 19, 2024 and sell it today you would earn a total of  324.00  from holding SPDR Bloomberg Barclays or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

SPDR Bloomberg Barclays  vs.  Strategy Shares

SPDR Bloomberg Barclays

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Bloomberg Barclays has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, SPDR Bloomberg is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Strategy Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategy Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Strategy Shares is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SPDR Bloomberg and Strategy Shares

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

The idea behind SPDR Bloomberg Barclays and Strategy Shares 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.