Correlation Between Legal General and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both Legal General 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 Legal General and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legal General UCITS and SPDR MSCI World, you can compare the effects of market volatilities on Legal General 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 Legal General with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legal General and SPDR MSCI.
Diversification Opportunities for Legal General and SPDR MSCI
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legal and SPDR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Legal General UCITS 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 Legal General 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 Legal General UCITS 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 Legal General i.e., Legal General and SPDR MSCI go up and down completely randomly.
Pair Corralation between Legal General and SPDR MSCI
Assuming the 90 days trading horizon Legal General is expected to generate 2.07 times less return on investment than SPDR MSCI. In addition to that, Legal General is 1.07 times more volatile than SPDR MSCI World. It trades about 0.15 of its total potential returns per unit of risk. SPDR MSCI World is currently generating about 0.32 per unit of volatility. If you would invest 6,447 in SPDR MSCI World on September 1, 2024 and sell it today you would earn a total of 498.00 from holding SPDR MSCI World or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legal General UCITS vs. SPDR MSCI World
Performance |
| Timeline |
| Legal General UCITS |
| SPDR MSCI World |
Legal General and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legal General and SPDR MSCI
The main advantage of trading using opposite Legal General and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legal General 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.| Legal General vs. iShares Core MSCI | Legal General vs. BlackRock ESG Multi Asset | Legal General vs. Pershing Square Holdings | Legal General vs. ASML Holding NV |
| SPDR MSCI vs. iShares Core MSCI | SPDR MSCI vs. BlackRock ESG Multi Asset | SPDR MSCI vs. Pershing Square Holdings | SPDR MSCI vs. ASML Holding NV |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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