Correlation Between SPDR Dow and SPDR FTSE
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and SPDR FTSE 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 Dow and SPDR FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and SPDR FTSE UK, you can compare the effects of market volatilities on SPDR Dow and SPDR FTSE 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 Dow with a short position of SPDR FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and SPDR FTSE.
Diversification Opportunities for SPDR Dow and SPDR FTSE
Average diversification
The 3 months correlation between SPDR and SPDR is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and SPDR FTSE UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR FTSE UK and SPDR Dow 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 Dow Jones are associated (or correlated) with SPDR FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR FTSE UK has no effect on the direction of SPDR Dow i.e., SPDR Dow and SPDR FTSE go up and down completely randomly.
Pair Corralation between SPDR Dow and SPDR FTSE
Assuming the 90 days trading horizon SPDR Dow Jones is expected to under-perform the SPDR FTSE. In addition to that, SPDR Dow is 1.45 times more volatile than SPDR FTSE UK. It trades about -0.02 of its total potential returns per unit of risk. SPDR FTSE UK is currently generating about 0.15 per unit of volatility. If you would invest 603.00 in SPDR FTSE UK on November 6, 2024 and sell it today you would earn a total of 34.00 from holding SPDR FTSE UK or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
SPDR Dow Jones vs. SPDR FTSE UK
Performance |
| Timeline |
| SPDR Dow Jones |
| SPDR FTSE UK |
SPDR Dow and SPDR FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and SPDR FTSE
The main advantage of trading using opposite SPDR Dow and SPDR FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, SPDR FTSE 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 FTSE will offset losses from the drop in SPDR FTSE's long position.| SPDR Dow vs. UBSFund Solutions MSCI | SPDR Dow vs. Vanguard SP 500 | SPDR Dow vs. iShares VII PLC | SPDR Dow vs. iShares Core SP |
| SPDR FTSE vs. SPDR MSCI Europe | SPDR FTSE vs. SPDR SP Utilities | SPDR FTSE vs. SPDR MSCI Europe | SPDR FTSE vs. SPDR MSCI EM |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |