Correlation Between SPDR Bloomberg and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg 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 SPDR Bloomberg and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Emerging and SPDR SP International, you can compare the effects of market volatilities on SPDR Bloomberg 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 SPDR Bloomberg with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and SPDR SP.
Diversification Opportunities for SPDR Bloomberg and SPDR SP
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Emerging and SPDR SP International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP International and SPDR Bloomberg 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 Bloomberg Emerging 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 International has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and SPDR SP
Given the investment horizon of 90 days SPDR Bloomberg is expected to generate 2.98 times less return on investment than SPDR SP. But when comparing it to its historical volatility, SPDR Bloomberg Emerging is 1.79 times less risky than SPDR SP. It trades about 0.02 of its potential returns per unit of risk. SPDR SP International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,963 in SPDR SP International on August 28, 2024 and sell it today you would earn a total of 237.00 from holding SPDR SP International or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg Emerging vs. SPDR SP International
Performance |
| Timeline |
| SPDR Bloomberg Emerging |
| SPDR SP International |
SPDR Bloomberg and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and SPDR SP
The main advantage of trading using opposite SPDR Bloomberg and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg 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.| SPDR Bloomberg vs. Schwab Fundamental International | SPDR Bloomberg vs. Xtrackers International Real | SPDR Bloomberg vs. Schwab Fundamental Small | SPDR Bloomberg vs. Schwab Fundamental Emerging |
| SPDR SP vs. Dimensional ETF Trust | SPDR SP vs. Vanguard Small Cap Index | SPDR SP vs. First Trust Multi Manager | SPDR SP vs. Vanguard SP Small Cap |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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