Correlation Between SPDR Bloomberg and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and VanEck Vectors 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 VanEck Vectors 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 VanEck Vectors Moodys, you can compare the effects of market volatilities on SPDR Bloomberg and VanEck Vectors 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 VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and VanEck Vectors.
Diversification Opportunities for SPDR Bloomberg and VanEck Vectors
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and VanEck is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Emerging and VanEck Vectors Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Moodys 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 VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Moodys has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and VanEck Vectors go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and VanEck Vectors
Given the investment horizon of 90 days SPDR Bloomberg is expected to generate 1.44 times less return on investment than VanEck Vectors. In addition to that, SPDR Bloomberg is 1.3 times more volatile than VanEck Vectors Moodys. It trades about 0.03 of its total potential returns per unit of risk. VanEck Vectors Moodys is currently generating about 0.06 per unit of volatility. If you would invest 1,908 in VanEck Vectors Moodys on August 23, 2024 and sell it today you would earn a total of 235.00 from holding VanEck Vectors Moodys or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg Emerging vs. VanEck Vectors Moodys
Performance |
| Timeline |
| SPDR Bloomberg Emerging |
| VanEck Vectors Moodys |
SPDR Bloomberg and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and VanEck Vectors
The main advantage of trading using opposite SPDR Bloomberg and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, VanEck Vectors 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 Vectors will offset losses from the drop in VanEck Vectors' 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 |
| VanEck Vectors vs. SPDR Barclays Short | VanEck Vectors vs. SPDR Bloomberg Emerging | VanEck Vectors vs. SPDR Barclays Long | VanEck Vectors vs. SPDR Barclays Short |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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