Correlation Between IShares STOXX and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both IShares STOXX and SPDR Barclays 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 IShares STOXX and SPDR Barclays into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares STOXX Europe and SPDR Barclays Euro, you can compare the effects of market volatilities on IShares STOXX and SPDR Barclays 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 IShares STOXX with a short position of SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares STOXX and SPDR Barclays.
Diversification Opportunities for IShares STOXX and SPDR Barclays
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and SPDR is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding iShares STOXX Europe and SPDR Barclays Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Euro and IShares 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 iShares STOXX Europe are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Euro has no effect on the direction of IShares STOXX i.e., IShares STOXX and SPDR Barclays go up and down completely randomly.
Pair Corralation between IShares STOXX and SPDR Barclays
Assuming the 90 days trading horizon iShares STOXX Europe is expected to under-perform the SPDR Barclays. In addition to that, IShares STOXX is 4.53 times more volatile than SPDR Barclays Euro. It trades about -0.19 of its total potential returns per unit of risk. SPDR Barclays Euro is currently generating about 0.06 per unit of volatility. If you would invest 5,361 in SPDR Barclays Euro on August 24, 2024 and sell it today you would earn a total of 12.00 from holding SPDR Barclays Euro or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares STOXX Europe vs. SPDR Barclays Euro
Performance |
| Timeline |
| iShares STOXX Europe |
| SPDR Barclays Euro |
IShares STOXX and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares STOXX and SPDR Barclays
The main advantage of trading using opposite IShares STOXX and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares STOXX position performs unexpectedly, SPDR Barclays 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 Barclays will offset losses from the drop in SPDR Barclays' long position.| IShares STOXX vs. Vanguard SP 500 | IShares STOXX vs. SPDR Dow Jones | IShares STOXX vs. iShares Core MSCI | IShares STOXX vs. iShares SP 500 |
| SPDR Barclays vs. Amundi ETF Govies | SPDR Barclays vs. iShares STOXX Europe | SPDR Barclays vs. iShares Global Infrastructure | SPDR Barclays vs. SPDR MSCI World |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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