Correlation Between Tether and SPX6900

Can any of the company-specific risk be diversified away by investing in both Tether and SPX6900 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 Tether and SPX6900 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tether and SPX6900, you can compare the effects of market volatilities on Tether and SPX6900 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 Tether with a short position of SPX6900. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tether and SPX6900.

Diversification Opportunities for Tether and SPX6900

0.0

Correlation Coefficient

Tether  SPX6900

Pay attention - limited upside

The 3 months correlation between Tether and SPX6900 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tether and SPX6900 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPX6900 and Tether 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 Tether are associated (or correlated) with SPX6900. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPX6900 has no effect on the direction of Tether i.e., Tether and SPX6900 go up and down completely randomly.

Pair Corralation between Tether and SPX6900

If you would invest  49.00  in SPX6900 on April 10, 2025 and sell it today you would earn a total of  101.00  from holding SPX6900 or generate 206.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Tether  vs.  SPX6900

Tether

Risk-Adjusted Performance

Very Weak

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

SPX6900

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPX6900 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, SPX6900 exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tether and SPX6900

The main advantage of trading using opposite Tether and SPX6900 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tether position performs unexpectedly, SPX6900 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 SPX6900 will offset losses from the drop in SPX6900's long position.

The idea behind Tether and SPX6900 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.