Correlation Between SPDR SP and GLCN
Can any of the company-specific risk be diversified away by investing in both SPDR SP and GLCN 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 GLCN 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 GLCN, you can compare the effects of market volatilities on SPDR SP and GLCN 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 GLCN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and GLCN.
Diversification Opportunities for SPDR SP and GLCN
Pay attention - limited upside
The 3 months correlation between SPDR and GLCN is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP China and GLCN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLCN 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 GLCN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLCN has no effect on the direction of SPDR SP i.e., SPDR SP and GLCN go up and down completely randomly.
Pair Corralation between SPDR SP and GLCN
If you would invest 7,113 in SPDR SP China on August 29, 2024 and sell it today you would earn a total of 584.00 from holding SPDR SP China or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
SPDR SP China vs. GLCN
Performance |
| Timeline |
| SPDR SP China |
| GLCN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and GLCN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and GLCN
The main advantage of trading using opposite SPDR SP and GLCN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, GLCN 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 GLCN will offset losses from the drop in GLCN'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 |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |