Correlation Between SPDR Bloomberg and US Treasury
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and US Treasury 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 US Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Investment and US Treasury 6, you can compare the effects of market volatilities on SPDR Bloomberg and US Treasury 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 US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and US Treasury.
Diversification Opportunities for SPDR Bloomberg and US Treasury
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and XBIL is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Investment and US Treasury 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 6 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 Investment are associated (or correlated) with US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 6 has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and US Treasury go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and US Treasury
Given the investment horizon of 90 days SPDR Bloomberg Investment is expected to generate 2.34 times more return on investment than US Treasury. However, SPDR Bloomberg is 2.34 times more volatile than US Treasury 6. It trades about 0.34 of its potential returns per unit of risk. US Treasury 6 is currently generating about 0.71 per unit of risk. If you would invest 2,991 in SPDR Bloomberg Investment on September 14, 2024 and sell it today you would earn a total of 87.00 from holding SPDR Bloomberg Investment or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg Investment vs. US Treasury 6
Performance |
| Timeline |
| SPDR Bloomberg Investment |
| US Treasury 6 |
SPDR Bloomberg and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and US Treasury
The main advantage of trading using opposite SPDR Bloomberg and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury's long position.| SPDR Bloomberg vs. iShares Treasury Floating | SPDR Bloomberg vs. SPDR Barclays Short | SPDR Bloomberg vs. SPDR Bloomberg 1 3 |
| US Treasury vs. iShares Treasury Floating | US Treasury vs. SPDR Bloomberg Investment | US Treasury vs. SPDR Barclays Short | US Treasury vs. SPDR Bloomberg 1 3 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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