Correlation Between SPDR SPASX and Global X
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and Global X 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 Global X 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 Global X Physical, you can compare the effects of market volatilities on SPDR SPASX and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and Global X.
Diversification Opportunities for SPDR SPASX and Global X
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Global is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and Global X Physical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Physical 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Physical has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and Global X go up and down completely randomly.
Pair Corralation between SPDR SPASX and Global X
Assuming the 90 days trading horizon SPDR SPASX is expected to generate 1.07 times less return on investment than Global X. But when comparing it to its historical volatility, SPDR SPASX 200 is 1.39 times less risky than Global X. It trades about 0.11 of its potential returns per unit of risk. Global X Physical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20,053 in Global X Physical on August 26, 2024 and sell it today you would earn a total of 4,856 from holding Global X Physical or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
SPDR SPASX 200 vs. Global X Physical
Performance |
| Timeline |
| SPDR SPASX 200 |
| Global X Physical |
SPDR SPASX and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and Global X
The main advantage of trading using opposite SPDR SPASX and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. CD Private Equity | Global X vs. SPDR SPASX 200 | Global X vs. Ecofibre | Global X 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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