Correlation Between Global X and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Global X and SPDR SP 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 Global X and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Copper and SPDR SP Metals, you can compare the effects of market volatilities on Global X and SPDR SP 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 Global X with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and SPDR SP.
Diversification Opportunities for Global X and SPDR SP
Very weak diversification
The 3 months correlation between Global and SPDR is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Global X Copper and SPDR SP Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Metals and Global X 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 Global X Copper are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Metals has no effect on the direction of Global X i.e., Global X and SPDR SP go up and down completely randomly.
Pair Corralation between Global X and SPDR SP
Given the investment horizon of 90 days Global X is expected to generate 1.29 times less return on investment than SPDR SP. In addition to that, Global X is 1.24 times more volatile than SPDR SP Metals. It trades about 0.03 of its total potential returns per unit of risk. SPDR SP Metals is currently generating about 0.05 per unit of volatility. If you would invest 5,110 in SPDR SP Metals on September 3, 2024 and sell it today you would earn a total of 1,765 from holding SPDR SP Metals or generate 34.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Copper vs. SPDR SP Metals
Performance |
| Timeline |
| Global X Copper |
| SPDR SP Metals |
Global X and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and SPDR SP
The main advantage of trading using opposite Global X and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| Global X vs. United States Copper | Global X vs. VanEck Rare EarthStrategic | Global X vs. Global X Uranium | Global X vs. SPDR SP Metals |
| SPDR SP vs. Materials Select Sector | SPDR SP vs. SPDR SP Oil | SPDR SP vs. SPDR SP Retail | SPDR SP vs. SPDR SP Homebuilders |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |