Correlation Between IShares International and SPDR SP
Can any of the company-specific risk be diversified away by investing in both IShares International 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 International 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 International Developed and SPDR SP International, you can compare the effects of market volatilities on IShares International 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 International with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares International and SPDR SP.
Diversification Opportunities for IShares International and SPDR SP
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and SPDR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iShares International Develope and SPDR SP International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP International and IShares International 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 International Developed 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 International has no effect on the direction of IShares International i.e., IShares International and SPDR SP go up and down completely randomly.
Pair Corralation between IShares International and SPDR SP
Given the investment horizon of 90 days iShares International Developed is expected to under-perform the SPDR SP. In addition to that, IShares International is 1.08 times more volatile than SPDR SP International. It trades about -0.34 of its total potential returns per unit of risk. SPDR SP International is currently generating about -0.1 per unit of volatility. If you would invest 3,216 in SPDR SP International on August 24, 2024 and sell it today you would lose (55.00) from holding SPDR SP International or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares International Develope vs. SPDR SP International
Performance |
| Timeline |
| iShares International |
| SPDR SP International |
IShares International and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares International and SPDR SP
The main advantage of trading using opposite IShares International and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares International 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 International vs. FlexShares Global Quality | IShares International vs. ALPS REIT Dividend | IShares International vs. WisdomTree New Economy | IShares International vs. First Trust RBA |
| SPDR SP vs. Dimensional ETF Trust | SPDR SP vs. Vanguard Small Cap Index | SPDR SP vs. First Trust Multi Manager | SPDR SP vs. Vanguard SP Small 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |