Correlation Between SPDR SP and IQ Merger
Can any of the company-specific risk be diversified away by investing in both SPDR SP and IQ Merger 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 SP and IQ Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Global and IQ Merger Arbitrage, you can compare the effects of market volatilities on SPDR SP and IQ Merger 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 SP with a short position of IQ Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and IQ Merger.
Diversification Opportunities for SPDR SP and IQ Merger
Very weak diversification
The 3 months correlation between SPDR and MNA is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Global and IQ Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Merger Arbitrage and SPDR SP 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 SP Global are associated (or correlated) with IQ Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Merger Arbitrage has no effect on the direction of SPDR SP i.e., SPDR SP and IQ Merger go up and down completely randomly.
Pair Corralation between SPDR SP and IQ Merger
Considering the 90-day investment horizon SPDR SP Global is expected to under-perform the IQ Merger. In addition to that, SPDR SP is 4.25 times more volatile than IQ Merger Arbitrage. It trades about -0.02 of its total potential returns per unit of risk. IQ Merger Arbitrage is currently generating about 0.17 per unit of volatility. If you would invest 3,132 in IQ Merger Arbitrage on September 3, 2024 and sell it today you would earn a total of 151.00 from holding IQ Merger Arbitrage or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Global vs. IQ Merger Arbitrage
Performance |
| Timeline |
| SPDR SP Global |
| IQ Merger Arbitrage |
SPDR SP and IQ Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and IQ Merger
The main advantage of trading using opposite SPDR SP and IQ Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, IQ Merger 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 IQ Merger will offset losses from the drop in IQ Merger's long position.| SPDR SP vs. FlexShares Morningstar Global | SPDR SP vs. SPDR SP North | SPDR SP vs. abrdn Physical Precious | SPDR SP vs. SPDR SP Global |
| IQ Merger vs. IQ Hedge Multi Strategy | IQ Merger vs. ProShares Merger ETF | IQ Merger vs. AGFiQ Market Neutral |
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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