Correlation Between IShares and SPDR SP
Can any of the company-specific risk be diversified away by investing in both IShares and SPDR SP 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 IShares and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares and SPDR SP Emerging, you can compare the effects of market volatilities on IShares and SPDR SP 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 IShares with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and SPDR SP.
Diversification Opportunities for IShares and SPDR SP
Pay attention - limited upside
The 3 months correlation between IShares and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IShares and SPDR SP Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Emerging and IShares 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 IShares are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Emerging has no effect on the direction of IShares i.e., IShares and SPDR SP go up and down completely randomly.
Pair Corralation between IShares and SPDR SP
Given the investment horizon of 90 days IShares is expected to generate 1.11 times less return on investment than SPDR SP. But when comparing it to its historical volatility, IShares is 1.0 times less risky than SPDR SP. It trades about 0.08 of its potential returns per unit of risk. SPDR SP Emerging is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,688 in SPDR SP Emerging on September 1, 2024 and sell it today you would earn a total of 849.00 from holding SPDR SP Emerging or generate 31.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 79.57% |
| Values | Daily Returns |
IShares vs. SPDR SP Emerging
Performance |
| Timeline |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPDR SP Emerging |
IShares and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares and SPDR SP
The main advantage of trading using opposite IShares and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| IShares vs. VanEck Merk Gold | IShares vs. Goldman Sachs Physical | IShares vs. GraniteShares Gold Trust | IShares vs. iShares Gold Trust |
| SPDR SP vs. SPDR SP International | SPDR SP vs. iShares Emerging Markets | SPDR SP vs. First Trust Dow | SPDR SP vs. SPDR SP Global |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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