Correlation Between Manitou BF and SSgA SPDR

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

By analyzing existing cross correlation between Manitou BF SA and SSgA SPDR SP, you can compare the effects of market volatilities on Manitou BF and SSgA SPDR 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 Manitou BF with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and SSgA SPDR.

Diversification Opportunities for Manitou BF and SSgA SPDR

-0.01

Correlation Coefficient

Manitou BF  SSgA SPDR

Good diversification

The 3 months correlation between Manitou and SSgA is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and SSgA SPDR SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR SP and Manitou BF 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 Manitou BF SA are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR SP has no effect on the direction of Manitou BF i.e., Manitou BF and SSgA SPDR go up and down completely randomly.

Pair Corralation between Manitou BF and SSgA SPDR

Assuming the 90 days trading horizon Manitou BF SA is expected to generate 2.99 times more return on investment than SSgA SPDR. However, Manitou BF is 2.99 times more volatile than SSgA SPDR SP. It trades about 0.1 of its potential returns per unit of risk. SSgA SPDR SP is currently generating about -0.13 per unit of risk. If you would invest  1,594  in Manitou BF SA on December 20, 2024 and sell it today you would earn a total of  302.00  from holding Manitou BF SA or generate 18.95% return on investment over 90 days.

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

Manitou BF SA  vs.  SSgA SPDR SP

Manitou BF SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manitou BF SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Manitou BF sustained solid returns over the last few months and may actually be approaching a breakup point.

SSgA SPDR SP

Risk-Adjusted Performance

Very Weak

Over the last 90 days SSgA SPDR SP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Manitou BF and SSgA SPDR

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

The idea behind Manitou BF SA and SSgA SPDR SP 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.