Correlation Between Main International and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both Main International and SPDR Galaxy 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 Main International and SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main International ETF and SPDR Galaxy Digital, you can compare the effects of market volatilities on Main International and SPDR Galaxy 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 Main International with a short position of SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main International and SPDR Galaxy.
Diversification Opportunities for Main International and SPDR Galaxy
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Main and SPDR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Main International ETF and SPDR Galaxy Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Digital and Main 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 Main International ETF are associated (or correlated) with SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Digital has no effect on the direction of Main International i.e., Main International and SPDR Galaxy go up and down completely randomly.
Pair Corralation between Main International and SPDR Galaxy
Given the investment horizon of 90 days Main International is expected to generate 5.25 times less return on investment than SPDR Galaxy. But when comparing it to its historical volatility, Main International ETF is 4.57 times less risky than SPDR Galaxy. It trades about 0.15 of its potential returns per unit of risk. SPDR Galaxy Digital is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,416 in SPDR Galaxy Digital on October 23, 2024 and sell it today you would earn a total of 350.00 from holding SPDR Galaxy Digital or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Main International ETF vs. SPDR Galaxy Digital
Performance |
| Timeline |
| Main International ETF |
| SPDR Galaxy Digital |
Main International and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main International and SPDR Galaxy
The main advantage of trading using opposite Main International and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main International position performs unexpectedly, SPDR Galaxy 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 Galaxy will offset losses from the drop in SPDR Galaxy's long position.| Main International vs. ADTRAN Inc | Main International vs. International Business Machines | Main International vs. Integrated Ventures | Main International vs. Harmonic |
| SPDR Galaxy vs. iShares Dividend and | SPDR Galaxy vs. Martin Currie Sustainable | SPDR Galaxy vs. VictoryShares THB Mid | SPDR Galaxy 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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