Correlation Between SPDR Morgan and Camelot Excalibur

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

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

Diversification Opportunities for SPDR Morgan and Camelot Excalibur

0.0

Correlation Coefficient

SPDR Morgan  Camelot Excalibur

Pay attention - limited upside

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

Pair Corralation between SPDR Morgan and Camelot Excalibur

If you would invest (100.00) in Camelot Excalibur Small on January 28, 2024 and sell it today you would earn a total of  100.00  from holding Camelot Excalibur Small or generate -100.0% return on investment over 90 days.

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

SPDR Morgan Stanley  vs.  Camelot Excalibur Small

SPDR Morgan Stanley

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Morgan Stanley are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SPDR Morgan is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Camelot Excalibur Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camelot Excalibur Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Camelot Excalibur is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Morgan and Camelot Excalibur

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

The idea behind SPDR Morgan Stanley and Camelot Excalibur Small 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.