Correlation Between International Business and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both International Business 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 International Business and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and SPDR MSCI ACWI, you can compare the effects of market volatilities on International Business 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 International Business with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and SPDR MSCI.
Diversification Opportunities for International Business and SPDR MSCI
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and SPDR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and SPDR MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI ACWI and International Business 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 International Business Machines 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 ACWI has no effect on the direction of International Business i.e., International Business and SPDR MSCI go up and down completely randomly.
Pair Corralation between International Business and SPDR MSCI
Considering the 90-day investment horizon International Business Machines is expected to generate 2.06 times more return on investment than SPDR MSCI. However, International Business is 2.06 times more volatile than SPDR MSCI ACWI. It trades about 0.35 of its potential returns per unit of risk. SPDR MSCI ACWI is currently generating about 0.24 per unit of risk. If you would invest 20,662 in International Business Machines on September 2, 2024 and sell it today you would earn a total of 2,079 from holding International Business Machines or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. SPDR MSCI ACWI
Performance |
| Timeline |
| International Business |
| SPDR MSCI ACWI |
International Business and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and SPDR MSCI
The main advantage of trading using opposite International Business and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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.| International Business vs. EPAM Systems | International Business vs. Infosys Ltd ADR | International Business vs. Cognizant Technology Solutions | International Business vs. FiscalNote Holdings |
| SPDR MSCI vs. WisdomTree Interest Rate | SPDR MSCI vs. First Trust Developed | SPDR MSCI vs. VictoryShares International Volatility | SPDR MSCI vs. Aquagold International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |