Correlation Between SPDR SP and VanEck UraniumNuclear

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

By analyzing existing cross correlation between SPDR SP Global and VanEck UraniumNuclear Energy, you can compare the effects of market volatilities on SPDR SP and VanEck UraniumNuclear 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 VanEck UraniumNuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and VanEck UraniumNuclear.

Diversification Opportunities for SPDR SP and VanEck UraniumNuclear

-0.09

Correlation Coefficient

SPDR SP  VanEck UraniumNuclear

Good diversification

The 3 months correlation between SPDR and VanEck is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Global and VanEck UraniumNuclear Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck UraniumNuclear 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 Global are associated (or correlated) with VanEck UraniumNuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck UraniumNuclear has no effect on the direction of SPDR SP i.e., SPDR SP and VanEck UraniumNuclear go up and down completely randomly.

Pair Corralation between SPDR SP and VanEck UraniumNuclear

Considering the 90-day investment horizon SPDR SP Global is expected to generate 0.47 times more return on investment than VanEck UraniumNuclear. However, SPDR SP Global is 2.14 times less risky than VanEck UraniumNuclear. It trades about -0.24 of its potential returns per unit of risk. VanEck UraniumNuclear Energy is currently generating about -0.31 per unit of risk. If you would invest  5,458  in SPDR SP Global on September 19, 2024 and sell it today you would lose (220.00) from holding SPDR SP Global or give up 4.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

SPDR SP Global  vs.  VanEck UraniumNuclear Energy

SPDR SP Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR SP Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

VanEck UraniumNuclear

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck UraniumNuclear Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, VanEck UraniumNuclear may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SPDR SP and VanEck UraniumNuclear

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

The idea behind SPDR SP Global and VanEck UraniumNuclear Energy 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.