Correlation Between SPDR SP and IShares Cohen
Can any of the company-specific risk be diversified away by investing in both SPDR SP and IShares Cohen 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 IShares Cohen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP International and iShares Cohen Steers, you can compare the effects of market volatilities on SPDR SP and IShares Cohen 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 IShares Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and IShares Cohen.
Diversification Opportunities for SPDR SP and IShares Cohen
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and IShares is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP International and iShares Cohen Steers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Cohen Steers 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 International are associated (or correlated) with IShares Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Cohen Steers has no effect on the direction of SPDR SP i.e., SPDR SP and IShares Cohen go up and down completely randomly.
Pair Corralation between SPDR SP and IShares Cohen
Considering the 90-day investment horizon SPDR SP International is expected to under-perform the IShares Cohen. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SP International is 1.51 times less risky than IShares Cohen. The etf trades about -0.12 of its potential returns per unit of risk. The iShares Cohen Steers is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,520 in iShares Cohen Steers on August 27, 2024 and sell it today you would lose (28.00) from holding iShares Cohen Steers or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP International vs. iShares Cohen Steers
Performance |
| Timeline |
| SPDR SP International |
| iShares Cohen Steers |
SPDR SP and IShares Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and IShares Cohen
The main advantage of trading using opposite SPDR SP and IShares Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, IShares Cohen 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 IShares Cohen will offset losses from the drop in IShares Cohen's long position.| SPDR SP vs. Dimensional ETF Trust | SPDR SP vs. Vanguard Small Cap Index | SPDR SP vs. First Trust Multi Manager | SPDR SP vs. Vanguard SP Small Cap |
| IShares Cohen vs. Vanguard Real Estate | IShares Cohen vs. Howard Hughes | IShares Cohen vs. Site Centers Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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