Correlation Between Ossiam Minimum and SPDR MSCI

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

By analyzing existing cross correlation between Ossiam Minimum Variance and SPDR MSCI Europe, you can compare the effects of market volatilities on Ossiam Minimum and SPDR MSCI 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 Ossiam Minimum with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ossiam Minimum and SPDR MSCI.

Diversification Opportunities for Ossiam Minimum and SPDR MSCI

0.0

Correlation Coefficient

Ossiam Minimum  SPDR MSCI

Pay attention - limited upside

The 3 months correlation between Ossiam and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ossiam Minimum Variance and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe and Ossiam Minimum 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 Ossiam Minimum Variance are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of Ossiam Minimum i.e., Ossiam Minimum and SPDR MSCI go up and down completely randomly.

Pair Corralation between Ossiam Minimum and SPDR MSCI

If you would invest  18,458  in SPDR MSCI Europe on December 27, 2024 and sell it today you would earn a total of  2,662  from holding SPDR MSCI Europe or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ossiam Minimum Variance  vs.  SPDR MSCI Europe

Ossiam Minimum Variance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ossiam Minimum Variance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ossiam Minimum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SPDR MSCI Europe

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI Europe are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SPDR MSCI sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ossiam Minimum and SPDR MSCI

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

The idea behind Ossiam Minimum Variance and SPDR MSCI Europe 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.