Correlation Between SPDR DoubleLine and PSMB
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and PSMB 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 DoubleLine and PSMB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Emerging and PSMB, you can compare the effects of market volatilities on SPDR DoubleLine and PSMB 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 DoubleLine with a short position of PSMB. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and PSMB.
Diversification Opportunities for SPDR DoubleLine and PSMB
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and PSMB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Emerging and PSMB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSMB and SPDR DoubleLine 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 DoubleLine Emerging are associated (or correlated) with PSMB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSMB has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and PSMB go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and PSMB
Given the investment horizon of 90 days SPDR DoubleLine Emerging is expected to generate 0.56 times more return on investment than PSMB. However, SPDR DoubleLine Emerging is 1.79 times less risky than PSMB. It trades about 0.11 of its potential returns per unit of risk. PSMB is currently generating about -0.02 per unit of risk. If you would invest 3,773 in SPDR DoubleLine Emerging on October 27, 2024 and sell it today you would earn a total of 473.00 from holding SPDR DoubleLine Emerging or generate 12.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 20.85% |
Values | Daily Returns |
SPDR DoubleLine Emerging vs. PSMB
Performance |
Timeline |
SPDR DoubleLine Emerging |
PSMB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR DoubleLine and PSMB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR DoubleLine and PSMB
The main advantage of trading using opposite SPDR DoubleLine and PSMB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, PSMB 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 PSMB will offset losses from the drop in PSMB's long position.SPDR DoubleLine vs. SPDR DoubleLine Short | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR MSCI Emerging | SPDR DoubleLine vs. SPDR Bloomberg International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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