Correlation Between SSgA SPDR and Malteries Franco

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

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

Diversification Opportunities for SSgA SPDR and Malteries Franco

0.15

Correlation Coefficient

SSgA SPDR  Malteries Franco

Average diversification

The 3 months correlation between SSgA and Malteries is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR SP and Malteries Franco Belges Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malteries Franco Belges and SSgA SPDR 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 SSgA SPDR SP are associated (or correlated) with Malteries Franco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malteries Franco Belges has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Malteries Franco go up and down completely randomly.

Pair Corralation between SSgA SPDR and Malteries Franco

Assuming the 90 days trading horizon SSgA SPDR is expected to generate 3.15 times less return on investment than Malteries Franco. But when comparing it to its historical volatility, SSgA SPDR SP is 2.0 times less risky than Malteries Franco. It trades about 0.11 of its potential returns per unit of risk. Malteries Franco Belges Socit is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  68,198  in Malteries Franco Belges Socit on October 26, 2024 and sell it today you would earn a total of  17,802  from holding Malteries Franco Belges Socit or generate 26.1% return on investment over 90 days.

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

SSgA SPDR SP  vs.  Malteries Franco Belges Socit

SSgA SPDR SP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR SP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SSgA SPDR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Malteries Franco Belges

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Malteries Franco Belges Socit are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Malteries Franco sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSgA SPDR and Malteries Franco

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

The idea behind SSgA SPDR SP and Malteries Franco Belges Socit 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.