Correlation Between IShares Global and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both IShares Global and SPDR Barclays 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 Barclays 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 Barclays Euro, you can compare the effects of market volatilities on IShares Global and SPDR Barclays 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 Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and SPDR Barclays.
Diversification Opportunities for IShares Global and SPDR Barclays
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and SPDR is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Infrastructure and SPDR Barclays Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Euro 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 Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Euro has no effect on the direction of IShares Global i.e., IShares Global and SPDR Barclays go up and down completely randomly.
Pair Corralation between IShares Global and SPDR Barclays
Assuming the 90 days trading horizon iShares Global Infrastructure is expected to generate 4.6 times more return on investment than SPDR Barclays. However, IShares Global is 4.6 times more volatile than SPDR Barclays Euro. It trades about 0.15 of its potential returns per unit of risk. SPDR Barclays Euro is currently generating about 0.06 per unit of risk. If you would invest 3,161 in iShares Global Infrastructure on August 24, 2024 and sell it today you would earn a total of 90.00 from holding iShares Global Infrastructure or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Infrastructure vs. SPDR Barclays Euro
Performance |
| Timeline |
| iShares Global Infra |
| SPDR Barclays Euro |
IShares Global and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and SPDR Barclays
The main advantage of trading using opposite IShares Global and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, SPDR Barclays 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 Barclays will offset losses from the drop in SPDR Barclays' long position.| IShares Global vs. Vanguard SP 500 | IShares Global vs. SPDR Dow Jones | IShares Global vs. iShares Core MSCI | IShares Global vs. iShares SP 500 |
| SPDR Barclays vs. Amundi ETF Govies | SPDR Barclays vs. iShares STOXX Europe | SPDR Barclays vs. iShares Global Infrastructure | SPDR Barclays vs. SPDR MSCI World |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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