Correlation Between IShares Global and SPDR SP
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 Global 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 Global Infrastructure and SPDR SP Global, you can compare the effects of market volatilities on IShares Global 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 Global with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and SPDR SP.
Diversification Opportunities for IShares Global and SPDR SP
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and SPDR is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Infrastructure and SPDR SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Global and IShares Global 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 Global Infrastructure 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 Global has no effect on the direction of IShares Global i.e., IShares Global and SPDR SP go up and down completely randomly.
Pair Corralation between IShares Global and SPDR SP
Considering the 90-day investment horizon iShares Global Infrastructure is expected to generate 0.97 times more return on investment than SPDR SP. However, iShares Global Infrastructure is 1.03 times less risky than SPDR SP. It trades about 0.03 of its potential returns per unit of risk. SPDR SP Global is currently generating about 0.02 per unit of risk. If you would invest 5,354 in iShares Global Infrastructure on November 18, 2024 and sell it today you would earn a total of 62.00 from holding iShares Global Infrastructure or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Infrastructure vs. SPDR SP Global
Performance |
| Timeline |
| iShares Global Infra |
| SPDR SP Global |
IShares Global and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and SPDR SP
The main advantage of trading using opposite IShares Global and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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 Global vs. SPDR SP Global | IShares Global vs. FlexShares STOXX Global | IShares Global vs. iShares Infrastructure ETF | IShares Global vs. iShares Global Utilities |
| SPDR SP vs. iShares Dividend and | SPDR SP vs. Martin Currie Sustainable | SPDR SP vs. VictoryShares THB Mid | SPDR SP vs. Mast Global Battery |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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