Correlation Between Vanguard EUR and SPDR Bloomberg

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

By analyzing existing cross correlation between Vanguard EUR Eurozone and SPDR Bloomberg Euro, you can compare the effects of market volatilities on Vanguard EUR and SPDR Bloomberg 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 Vanguard EUR with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard EUR and SPDR Bloomberg.

Diversification Opportunities for Vanguard EUR and SPDR Bloomberg

0.0

Correlation Coefficient

Vanguard EUR  SPDR Bloomberg

Pay attention - limited upside

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

Pair Corralation between Vanguard EUR and SPDR Bloomberg

If you would invest  2,568  in SPDR Bloomberg Euro on September 13, 2024 and sell it today you would earn a total of  42.00  from holding SPDR Bloomberg Euro or generate 1.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Vanguard EUR Eurozone  vs.  SPDR Bloomberg Euro

Vanguard EUR Eurozone

Risk-Adjusted Performance

0 of 100

Very Weak

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

SPDR Bloomberg Euro

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Euro are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vanguard EUR and SPDR Bloomberg

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

The idea behind Vanguard EUR Eurozone and SPDR Bloomberg Euro 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.