Correlation Between SPDR SP and Xtrackers Harvest
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Xtrackers Harvest 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 Xtrackers Harvest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP China and Xtrackers Harvest CSI, you can compare the effects of market volatilities on SPDR SP and Xtrackers Harvest 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 Xtrackers Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Xtrackers Harvest.
Diversification Opportunities for SPDR SP and Xtrackers Harvest
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Xtrackers is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP China and Xtrackers Harvest CSI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Harvest CSI 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 China are associated (or correlated) with Xtrackers Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Harvest CSI has no effect on the direction of SPDR SP i.e., SPDR SP and Xtrackers Harvest go up and down completely randomly.
Pair Corralation between SPDR SP and Xtrackers Harvest
Considering the 90-day investment horizon SPDR SP China is expected to generate 0.71 times more return on investment than Xtrackers Harvest. However, SPDR SP China is 1.41 times less risky than Xtrackers Harvest. It trades about -0.09 of its potential returns per unit of risk. Xtrackers Harvest CSI is currently generating about -0.18 per unit of risk. If you would invest 7,639 in SPDR SP China on October 21, 2024 and sell it today you would lose (167.00) from holding SPDR SP China or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP China vs. Xtrackers Harvest CSI
Performance |
| Timeline |
| SPDR SP China |
| Xtrackers Harvest CSI |
SPDR SP and Xtrackers Harvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Xtrackers Harvest
The main advantage of trading using opposite SPDR SP and Xtrackers Harvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Xtrackers Harvest 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 Xtrackers Harvest will offset losses from the drop in Xtrackers Harvest's long position.| SPDR SP vs. Invesco Golden Dragon | SPDR SP vs. iShares MSCI Hong | SPDR SP vs. iShares MSCI China | SPDR SP vs. iShares China Large Cap |
| Xtrackers Harvest vs. KraneShares Bosera MSCI | Xtrackers Harvest vs. First Trust China | Xtrackers Harvest vs. Aquagold International | Xtrackers Harvest vs. Morningstar Unconstrained Allocation |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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