Correlation Between Global X and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Global X and SPDR Portfolio 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 Global X and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and SPDR Portfolio Emerging, you can compare the effects of market volatilities on Global X and SPDR Portfolio 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 Global X with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and SPDR Portfolio.
Diversification Opportunities for Global X and SPDR Portfolio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and SPDR Portfolio Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Emerging and Global X 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 Global X Funds are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Emerging has no effect on the direction of Global X i.e., Global X and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Global X and SPDR Portfolio
Considering the 90-day investment horizon Global X Funds is expected to under-perform the SPDR Portfolio. But the etf apears to be less risky and, when comparing its historical volatility, Global X Funds is 1.16 times less risky than SPDR Portfolio. The etf trades about -0.2 of its potential returns per unit of risk. The SPDR Portfolio Emerging is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 4,067 in SPDR Portfolio Emerging on August 24, 2024 and sell it today you would lose (136.00) from holding SPDR Portfolio Emerging or give up 3.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. SPDR Portfolio Emerging
Performance |
| Timeline |
| Global X Funds |
| SPDR Portfolio Emerging |
Global X and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and SPDR Portfolio
The main advantage of trading using opposite Global X and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Global X vs. iShares International Developed | Global X vs. iShares MSCI Emerging | Global X vs. iShares MSCI Frontier | Global X vs. iShares MSCI Emerging |
| SPDR Portfolio vs. iShares International Developed | SPDR Portfolio vs. iShares MSCI Emerging | SPDR Portfolio vs. iShares MSCI Frontier | SPDR Portfolio vs. iShares MSCI Emerging |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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