Correlation Between SPDR DoubleLine and IShares JP
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and IShares JP 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 DoubleLine and IShares JP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Emerging and iShares JP Morgan, you can compare the effects of market volatilities on SPDR DoubleLine and IShares JP 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 DoubleLine with a short position of IShares JP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and IShares JP.
Diversification Opportunities for SPDR DoubleLine and IShares JP
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and IShares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Emerging and iShares JP Morgan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares JP Morgan and SPDR DoubleLine 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 DoubleLine Emerging are associated (or correlated) with IShares JP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares JP Morgan has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and IShares JP go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and IShares JP
Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 1.15 times less return on investment than IShares JP. But when comparing it to its historical volatility, SPDR DoubleLine Emerging is 2.19 times less risky than IShares JP. It trades about 0.12 of its potential returns per unit of risk. iShares JP Morgan is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,897 in iShares JP Morgan on August 31, 2024 and sell it today you would earn a total of 1,311 from holding iShares JP Morgan or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Emerging vs. iShares JP Morgan
Performance |
| Timeline |
| SPDR DoubleLine Emerging |
| iShares JP Morgan |
SPDR DoubleLine and IShares JP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and IShares JP
The main advantage of trading using opposite SPDR DoubleLine and IShares JP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, IShares JP 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 IShares JP will offset losses from the drop in IShares JP's long position.| SPDR DoubleLine vs. SPDR DoubleLine Short | SPDR DoubleLine vs. SPDR SSgA Ultra | SPDR DoubleLine vs. SPDR MSCI Emerging | SPDR DoubleLine vs. SPDR Bloomberg International |
| IShares JP vs. Invesco Emerging Markets | IShares JP vs. iShares JP Morgan | IShares JP vs. SPDR Bloomberg Barclays | IShares JP vs. SPDR DoubleLine 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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