Correlation Between IShares Focused and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both IShares Focused and SPDR Portfolio 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 Focused and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Focused Value and SPDR Portfolio Aggregate, you can compare the effects of market volatilities on IShares Focused and SPDR Portfolio 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 Focused with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Focused and SPDR Portfolio.
Diversification Opportunities for IShares Focused and SPDR Portfolio
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and SPDR is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Focused Value and SPDR Portfolio Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Aggregate and IShares Focused 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 Focused Value are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Aggregate has no effect on the direction of IShares Focused i.e., IShares Focused and SPDR Portfolio go up and down completely randomly.
Pair Corralation between IShares Focused and SPDR Portfolio
Given the investment horizon of 90 days iShares Focused Value is expected to generate 2.79 times more return on investment than SPDR Portfolio. However, IShares Focused is 2.79 times more volatile than SPDR Portfolio Aggregate. It trades about 0.09 of its potential returns per unit of risk. SPDR Portfolio Aggregate is currently generating about 0.05 per unit of risk. If you would invest 5,392 in iShares Focused Value on September 12, 2024 and sell it today you would earn a total of 1,929 from holding iShares Focused Value or generate 35.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Focused Value vs. SPDR Portfolio Aggregate
Performance |
| Timeline |
| iShares Focused Value |
| SPDR Portfolio Aggregate |
IShares Focused and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Focused and SPDR Portfolio
The main advantage of trading using opposite IShares Focused and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Focused position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.| IShares Focused vs. SPDR Portfolio Aggregate | IShares Focused vs. WBI Power Factor | IShares Focused vs. Global X MSCI | IShares Focused vs. HUMANA INC |
| SPDR Portfolio vs. ClearShares Ultra Short Maturity | SPDR Portfolio vs. PGIM Active High | SPDR Portfolio vs. Pacer Trendpilot Bond | SPDR Portfolio vs. Pacer Lunt Large |
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 CEOs Directory module to screen CEOs from public companies around the world.
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