Correlation Between SPDR Bloomberg and ETF Series

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Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and ETF Series 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 ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Barclays and ETF Series Solutions, you can compare the effects of market volatilities on SPDR Bloomberg and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and ETF Series.

Diversification Opportunities for SPDR Bloomberg and ETF Series

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between SPDR and ETF is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Barclays and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 Barclays are associated (or correlated) with ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and ETF Series go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and ETF Series

Given the investment horizon of 90 days SPDR Bloomberg is expected to generate 1.11 times less return on investment than ETF Series. But when comparing it to its historical volatility, SPDR Bloomberg Barclays is 2.13 times less risky than ETF Series. It trades about 0.1 of its potential returns per unit of risk. ETF Series Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,425  in ETF Series Solutions on September 14, 2024 and sell it today you would earn a total of  263.00  from holding ETF Series Solutions or generate 10.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy86.99%
ValuesDaily Returns

SPDR Bloomberg Barclays  vs.  ETF Series Solutions

 Performance 
       Timeline  
SPDR Bloomberg Barclays 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SPDR Bloomberg Barclays has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, SPDR Bloomberg is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
ETF Series Solutions 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in ETF Series Solutions are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, ETF Series may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SPDR Bloomberg and ETF Series Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPDR Bloomberg and ETF Series

The main advantage of trading using opposite SPDR Bloomberg and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.
The idea behind SPDR Bloomberg Barclays and ETF Series Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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