Correlation Between SPDR SP and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both SPDR SP and SPDR MSCI 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 SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Energy and SPDR MSCI Europe, you can compare the effects of market volatilities on SPDR SP and SPDR MSCI 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and SPDR MSCI.
Diversification Opportunities for SPDR SP and SPDR MSCI
Pay attention - limited upside
The 3 months correlation between SPDR and SPDR is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Energy and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe 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 Energy are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of SPDR SP i.e., SPDR SP and SPDR MSCI go up and down completely randomly.
Pair Corralation between SPDR SP and SPDR MSCI
Assuming the 90 days trading horizon SPDR SP Energy is expected to generate 1.63 times more return on investment than SPDR MSCI. However, SPDR SP is 1.63 times more volatile than SPDR MSCI Europe. It trades about 0.38 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about -0.13 per unit of risk. If you would invest 2,634 in SPDR SP Energy on August 28, 2024 and sell it today you would earn a total of 293.00 from holding SPDR SP Energy or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Energy vs. SPDR MSCI Europe
Performance |
| Timeline |
| SPDR SP Energy |
| SPDR MSCI Europe |
SPDR SP and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and SPDR MSCI
The main advantage of trading using opposite SPDR SP and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI's long position.| SPDR SP vs. Leverage Shares 3x | SPDR SP vs. Leverage Shares 3x | SPDR SP vs. Leverage Shares 3x | SPDR SP vs. WisdomTree Short GBP |
| SPDR MSCI vs. SPDR Dow Jones | SPDR MSCI vs. SPDR SP Dividend | SPDR MSCI vs. SPDR Barclays Euro | SPDR MSCI vs. SPDR SP Consumer |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |