Correlation Between SmartETFs Asia and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both SmartETFs Asia and SPDR MSCI 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 SmartETFs Asia and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmartETFs Asia Pacific and SPDR MSCI World, you can compare the effects of market volatilities on SmartETFs Asia and SPDR MSCI 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 SmartETFs Asia with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartETFs Asia and SPDR MSCI.
Diversification Opportunities for SmartETFs Asia and SPDR MSCI
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SmartETFs and SPDR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SmartETFs Asia Pacific and SPDR MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI World and SmartETFs Asia 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 SmartETFs Asia Pacific are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI World has no effect on the direction of SmartETFs Asia i.e., SmartETFs Asia and SPDR MSCI go up and down completely randomly.
Pair Corralation between SmartETFs Asia and SPDR MSCI
Given the investment horizon of 90 days SmartETFs Asia Pacific is expected to under-perform the SPDR MSCI. In addition to that, SmartETFs Asia is 1.09 times more volatile than SPDR MSCI World. It trades about -0.16 of its total potential returns per unit of risk. SPDR MSCI World is currently generating about -0.1 per unit of volatility. If you would invest 12,722 in SPDR MSCI World on January 10, 2025 and sell it today you would lose (681.10) from holding SPDR MSCI World or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SmartETFs Asia Pacific vs. SPDR MSCI World
Performance |
| Timeline |
| SmartETFs Asia Pacific |
| SPDR MSCI World |
SmartETFs Asia and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SmartETFs Asia and SPDR MSCI
The main advantage of trading using opposite SmartETFs Asia and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartETFs Asia position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI's long position.| SmartETFs Asia vs. Alliancebernstein National Municipal | SmartETFs Asia vs. Armada Hflr Pr | SmartETFs Asia vs. Aberdeen Global Dynamic | SmartETFs Asia vs. Aquagold International |
| SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR MSCI USA | SPDR MSCI vs. SPDR SP 1500 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |