Correlation Between IShares Global and SPDR Global
Can any of the company-specific risk be diversified away by investing in both IShares Global and SPDR Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global 100 and SPDR Global Dow, you can compare the effects of market volatilities on IShares Global and SPDR Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and SPDR Global.
Diversification Opportunities for IShares Global and SPDR Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and SPDR is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global 100 and SPDR Global Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Global Dow 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 100 are associated (or correlated) with SPDR Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Global Dow has no effect on the direction of IShares Global i.e., IShares Global and SPDR Global go up and down completely randomly.
Pair Corralation between IShares Global and SPDR Global
Considering the 90-day investment horizon iShares Global 100 is expected to generate 1.29 times more return on investment than SPDR Global. However, IShares Global is 1.29 times more volatile than SPDR Global Dow. It trades about 0.06 of its potential returns per unit of risk. SPDR Global Dow is currently generating about 0.08 per unit of risk. If you would invest 9,287 in iShares Global 100 on September 1, 2024 and sell it today you would earn a total of 676.00 from holding iShares Global 100 or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global 100 vs. SPDR Global Dow
Performance |
| Timeline |
| iShares Global 100 |
| SPDR Global Dow |
IShares Global and SPDR Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and SPDR Global
The main advantage of trading using opposite IShares Global and SPDR Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, SPDR Global 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 Global will offset losses from the drop in SPDR Global's long position.| IShares Global vs. iShares Europe ETF | IShares Global vs. iShares Global Financials | IShares Global vs. iShares Global Healthcare | IShares Global vs. iShares Global Comm |
| SPDR Global vs. iShares Global 100 | SPDR Global vs. iShares MSCI Belgium | SPDR Global vs. iShares MSCI Netherlands | SPDR Global vs. iShares Dow Jones |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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