Correlation Between IShares Core and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both IShares Core and SPDR FTSE 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 IShares Core and SPDR FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and SPDR FTSE UK, you can compare the effects of market volatilities on IShares Core and SPDR FTSE 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 IShares Core with a short position of SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SPDR FTSE.
Diversification Opportunities for IShares Core and SPDR FTSE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and SPDR is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and SPDR FTSE UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE UK and IShares Core 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 iShares Core SP are associated (or correlated) with SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE UK has no effect on the direction of IShares Core i.e., IShares Core and SPDR FTSE go up and down completely randomly.
Pair Corralation between IShares Core and SPDR FTSE
Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.59 times more return on investment than SPDR FTSE. However, iShares Core SP is 1.69 times less risky than SPDR FTSE. It trades about 0.17 of its potential returns per unit of risk. SPDR FTSE UK is currently generating about 0.05 per unit of risk. If you would invest 45,875 in iShares Core SP on September 4, 2024 and sell it today you would earn a total of 18,205 from holding iShares Core SP or generate 39.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. SPDR FTSE UK
Performance |
| Timeline |
| iShares Core SP |
| SPDR FTSE UK |
IShares Core and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SPDR FTSE
The main advantage of trading using opposite IShares Core and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SPDR FTSE 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 FTSE will offset losses from the drop in SPDR FTSE's long position.| IShares Core vs. iShares Corp Bond | IShares Core vs. iShares Emerging Asia | IShares Core vs. iShares MSCI Global | IShares Core vs. iShares VII PLC |
| SPDR FTSE vs. UBSFund Solutions MSCI | SPDR FTSE vs. Vanguard SP 500 | SPDR FTSE vs. iShares VII PLC | SPDR FTSE vs. iShares Core SP |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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