Correlation Between SSgA SPDR and Multi Units

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

By analyzing existing cross correlation between SSgA SPDR ETFs and Multi Units France, you can compare the effects of market volatilities on SSgA SPDR and Multi Units 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 Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and Multi Units.

Diversification Opportunities for SSgA SPDR and Multi Units

0.7

Correlation Coefficient

SSgA SPDR  Multi Units

Poor diversification

The 3 months correlation between SSgA and Multi is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France 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 ETFs are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Multi Units go up and down completely randomly.

Pair Corralation between SSgA SPDR and Multi Units

Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 0.27 times more return on investment than Multi Units. However, SSgA SPDR ETFs is 3.71 times less risky than Multi Units. It trades about 0.18 of its potential returns per unit of risk. Multi Units France is currently generating about 0.01 per unit of risk. If you would invest  4,875  in SSgA SPDR ETFs on April 22, 2025 and sell it today you would earn a total of  173.00  from holding SSgA SPDR ETFs or generate 3.55% return on investment over 90 days.

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

SSgA SPDR ETFs  vs.  Multi Units France

SSgA SPDR ETFs

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR ETFs are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SSgA SPDR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Multi Units France

Risk-Adjusted Performance

Very Weak

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

Pair Trading with SSgA SPDR and Multi Units

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

The idea behind SSgA SPDR ETFs and Multi Units France 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.