The correlation of SPDR STOXX is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.
SPDR STOXX Correlation With Market
Weak diversification
The correlation between SPDR STOXX Europe and DJI is 0.39 (i.e., Weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding SPDR STOXX Europe and DJI in the same portfolio, assuming nothing else is changed.
SPDR
Check out Investing Opportunities to better understand how to build diversified portfolios, which includes a position in SPDR STOXX Europe. Also, note that the market value of any etf could be closely tied with the direction of predictive economic indicators such as signals in income.
Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.
There is a big difference between SPDR Etf performing well and SPDR STOXX ETF doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze SPDR STOXX's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.