Correlation Between SPDR Barclays and ClearShares Ultra

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

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

Diversification Opportunities for SPDR Barclays and ClearShares Ultra

-0.54

Correlation Coefficient

SPDR Barclays  ClearShares Ultra

Excellent diversification

The 3 months correlation between SPDR and ClearShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and ClearShares Ultra Short Maturi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares Ultra Short and SPDR Barclays 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 Barclays Short are associated (or correlated) with ClearShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares Ultra Short has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and ClearShares Ultra go up and down completely randomly.

Pair Corralation between SPDR Barclays and ClearShares Ultra

Given the investment horizon of 90 days SPDR Barclays Short is expected to under-perform the ClearShares Ultra. In addition to that, SPDR Barclays is 5.52 times more volatile than ClearShares Ultra Short Maturity. It trades about -0.02 of its total potential returns per unit of risk. ClearShares Ultra Short Maturity is currently generating about 1.1 per unit of volatility. If you would invest  9,911  in ClearShares Ultra Short Maturity on September 13, 2024 and sell it today you would earn a total of  114.00  from holding ClearShares Ultra Short Maturity or generate 1.15% return on investment over 90 days.

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

SPDR Barclays Short  vs.  ClearShares Ultra Short Maturi

SPDR Barclays Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Barclays Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SPDR Barclays is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ClearShares Ultra Short

Risk-Adjusted Performance

86 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in ClearShares Ultra Short Maturity are ranked lower than 86 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, ClearShares Ultra is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SPDR Barclays and ClearShares Ultra

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

The idea behind SPDR Barclays Short and ClearShares Ultra Short Maturity 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.