Correlation Between SPDR Series and BSAE

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

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

Diversification Opportunities for SPDR Series and BSAE

0.0

Correlation Coefficient

SPDR Series  BSAE

Pay attention - limited upside

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

Pair Corralation between SPDR Series and BSAE

If you would invest  9,233  in SPDR Series Trust on February 1, 2024 and sell it today you would earn a total of  704.00  from holding SPDR Series Trust or generate 7.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SPDR Series Trust  vs.  BSAE

SPDR Series Trust

Risk-Adjusted Performance

72 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Series Trust are ranked lower than 72 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, SPDR Series is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BSAE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BSAE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BSAE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR Series and BSAE

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

The idea behind SPDR Series Trust and BSAE 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.