Correlation Between SPDR SPASX and VanEck 1
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and VanEck 1 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 SPDR SPASX and VanEck 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and VanEck 1 5 Year, you can compare the effects of market volatilities on SPDR SPASX and VanEck 1 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 SPDR SPASX with a short position of VanEck 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and VanEck 1.
Diversification Opportunities for SPDR SPASX and VanEck 1
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and VanEck is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and VanEck 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck 1 5 and SPDR SPASX 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 SPDR SPASX 200 are associated (or correlated) with VanEck 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck 1 5 has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and VanEck 1 go up and down completely randomly.
Pair Corralation between SPDR SPASX and VanEck 1
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 2.7 times more return on investment than VanEck 1. However, SPDR SPASX is 2.7 times more volatile than VanEck 1 5 Year. It trades about 0.06 of its potential returns per unit of risk. VanEck 1 5 Year is currently generating about 0.08 per unit of risk. If you would invest 2,176 in SPDR SPASX 200 on August 26, 2024 and sell it today you would earn a total of 517.00 from holding SPDR SPASX 200 or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.8% |
| Values | Daily Returns |
SPDR SPASX 200 vs. VanEck 1 5 Year
Performance |
| Timeline |
| SPDR SPASX 200 |
| VanEck 1 5 |
SPDR SPASX and VanEck 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and VanEck 1
The main advantage of trading using opposite SPDR SPASX and VanEck 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, VanEck 1 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 VanEck 1 will offset losses from the drop in VanEck 1's long position.| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
| VanEck 1 vs. CD Private Equity | VanEck 1 vs. SPDR SPASX 200 | VanEck 1 vs. Ecofibre | VanEck 1 vs. iShares Global Healthcare |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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