Correlation Between IShares Core and SPDR Series
Can any of the company-specific risk be diversified away by investing in both IShares Core and SPDR Series 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 Core and SPDR Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and SPDR Series Trust, you can compare the effects of market volatilities on IShares Core and SPDR Series 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 Core with a short position of SPDR Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SPDR Series.
Diversification Opportunities for IShares Core and SPDR Series
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and SPDR is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and SPDR Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Series Trust and IShares Core 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 Core SP are associated (or correlated) with SPDR Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Series Trust has no effect on the direction of IShares Core i.e., IShares Core and SPDR Series go up and down completely randomly.
Pair Corralation between IShares Core and SPDR Series
Considering the 90-day investment horizon IShares Core is expected to generate 122.03 times less return on investment than SPDR Series. But when comparing it to its historical volatility, iShares Core SP is 157.63 times less risky than SPDR Series. It trades about 0.15 of its potential returns per unit of risk. SPDR Series Trust is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.00 in SPDR Series Trust on September 14, 2024 and sell it today you would earn a total of 2,606 from holding SPDR Series Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 26.77% |
| Values | Daily Returns |
iShares Core SP vs. SPDR Series Trust
Performance |
| Timeline |
| iShares Core SP |
| SPDR Series Trust |
IShares Core and SPDR Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SPDR Series
The main advantage of trading using opposite IShares Core and SPDR Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SPDR Series 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 Series will offset losses from the drop in SPDR Series' long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| SPDR Series vs. Vanguard Total Stock | SPDR Series vs. SPDR SP 500 | SPDR Series vs. iShares Core SP | SPDR Series vs. Vanguard Total Bond |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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