Correlation Between FlexShares STOXX and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both FlexShares STOXX and SPDR Bloomberg 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 FlexShares STOXX and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares STOXX Global and SPDR Bloomberg Barclays, you can compare the effects of market volatilities on FlexShares STOXX and SPDR Bloomberg 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 FlexShares STOXX with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares STOXX and SPDR Bloomberg.
Diversification Opportunities for FlexShares STOXX and SPDR Bloomberg
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FlexShares and SPDR is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares STOXX Global and SPDR Bloomberg Barclays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Barclays and FlexShares STOXX 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 FlexShares STOXX Global are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Barclays has no effect on the direction of FlexShares STOXX i.e., FlexShares STOXX and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between FlexShares STOXX and SPDR Bloomberg
Given the investment horizon of 90 days FlexShares STOXX Global is expected to generate 1.98 times more return on investment than SPDR Bloomberg. However, FlexShares STOXX is 1.98 times more volatile than SPDR Bloomberg Barclays. It trades about 0.07 of its potential returns per unit of risk. SPDR Bloomberg Barclays is currently generating about 0.1 per unit of risk. If you would invest 16,241 in FlexShares STOXX Global on September 3, 2024 and sell it today you would earn a total of 1,074 from holding FlexShares STOXX Global or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShares STOXX Global vs. SPDR Bloomberg Barclays
Performance |
| Timeline |
| FlexShares STOXX Global |
| SPDR Bloomberg Barclays |
FlexShares STOXX and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares STOXX and SPDR Bloomberg
The main advantage of trading using opposite FlexShares STOXX and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares STOXX position performs unexpectedly, SPDR Bloomberg 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 Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| FlexShares STOXX vs. FlexShares Quality Large | FlexShares STOXX vs. FlexShares Disciplined Duration | FlexShares STOXX vs. FlexShares Real Assets | FlexShares STOXX vs. First Trust Developed |
| SPDR Bloomberg vs. SPDR DoubleLine Emerging | SPDR Bloomberg vs. SPDR SSGA Fixed | SPDR Bloomberg vs. SPDR Series Trust | SPDR Bloomberg vs. SSGA Active Trust |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |