SPDR Dow Debt
| RWR Etf | USD 98.44 0.32 0.32% |
SPDR Dow Jones holds a debt-to-equity ratio of 0.012. . SPDR Dow's financial risk is the risk to SPDR Dow stockholders that is caused by an increase in debt.
Asset vs Debt
Equity vs Debt
SPDR Dow's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. SPDR Dow's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the ETF is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps SPDR Etf's retail investors understand whether an upcoming fall or rise in the market will negatively affect SPDR Dow's stakeholders.
For most companies, including SPDR Dow, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for SPDR Dow Jones, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, SPDR Dow's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Total Assets 1.8 B |
Given that SPDR Dow's debt-to-equity ratio measures a ETF's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which SPDR Dow is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of SPDR Dow to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, SPDR Dow is said to be less leveraged. If creditors hold a majority of SPDR Dow's assets, the ETF is said to be highly leveraged.
SPDR |
SPDR Dow Jones Debt to Cash Allocation
Many companies such as SPDR Dow, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
SPDR Dow Jones has 17.11 M in debt with debt to equity (D/E) ratio of 0.01, which may show that the company is not taking advantage of profits from borrowing. SPDR Dow Jones has a current ratio of 1.33, which is typical for the industry and considered as normal. Debt can assist SPDR Dow until it has trouble settling it off, either with new capital or with free cash flow. So, SPDR Dow's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like SPDR Dow Jones sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for SPDR to invest in growth at high rates of return. When we think about SPDR Dow's use of debt, we should always consider it together with cash and equity.SPDR Dow Assets Financed by Debt
Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the SPDR Dow's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of SPDR Dow, which in turn will lower the firm's financial flexibility.SPDR Dow Corporate Bonds Issued
Understaning SPDR Dow Use of Financial Leverage
SPDR Dow's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to SPDR Dow's current equity. If creditors own a majority of SPDR Dow's assets, the company is considered highly leveraged. Understanding the composition and structure of SPDR Dow's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
The fund generally invests substantially all, but at least 80, of its total assets in the securities comprising the index. DJ REIT is traded on NYSEARCA Exchange in the United States. Please read more on our technical analysis page.
Pair Trading with SPDR Dow
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if SPDR Dow position performs unexpectedly, the other equity 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 SPDR Dow will appreciate offsetting losses from the drop in the long position's value.Moving together with SPDR Etf
| 0.99 | VNQ | Vanguard Real Estate Sell-off Trend | PairCorr |
| 0.63 | HHH | Howard Hughes | PairCorr |
| 0.99 | XLRE | Real Estate Sell-off Trend | PairCorr |
| 0.66 | SITC | Site Centers Corp | PairCorr |
Moving against SPDR Etf
| 0.73 | VCAR | Simplify Volt RoboCar Symbol Change | PairCorr |
| 0.55 | WTID | UBS ETRACS | PairCorr |
| 0.55 | TSLL | Direxion Shares ETF Buyout Trend | PairCorr |
| 0.54 | RTL | Pacer Financial | PairCorr |
The ability to find closely correlated positions to SPDR Dow could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace SPDR Dow when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back SPDR Dow - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling SPDR Dow Jones to buy it.
The correlation of SPDR Dow 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 perfect positive correlation (i.e., a correlation coefficient of +1) implies that as SPDR Dow moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if SPDR Dow Jones moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for SPDR Dow can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out the analysis of SPDR Dow Fundamentals Over Time. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
The market value of SPDR Dow Jones is measured differently than its book value, which is the value of SPDR that is recorded on the company's balance sheet. Investors also form their own opinion of SPDR Dow's value that differs from its market value or its book value, called intrinsic value, which is SPDR Dow's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because SPDR Dow's market value can be influenced by many factors that don't directly affect SPDR Dow's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between SPDR Dow's value and its price as these two are different measures arrived at by different means. Investors typically determine if SPDR Dow is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, SPDR Dow's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.