Correlation Between IShares Russell and SPDR Russell
Can any of the company-specific risk be diversified away by investing in both IShares Russell and SPDR Russell 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 Russell and SPDR Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell Mid Cap and SPDR Russell 1000, you can compare the effects of market volatilities on IShares Russell and SPDR Russell 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 Russell with a short position of SPDR Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and SPDR Russell.
Diversification Opportunities for IShares Russell and SPDR Russell
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell Mid Cap and SPDR Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Russell 1000 and IShares Russell 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 Russell Mid Cap are associated (or correlated) with SPDR Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Russell 1000 has no effect on the direction of IShares Russell i.e., IShares Russell and SPDR Russell go up and down completely randomly.
Pair Corralation between IShares Russell and SPDR Russell
Considering the 90-day investment horizon iShares Russell Mid Cap is expected to generate 0.94 times more return on investment than SPDR Russell. However, iShares Russell Mid Cap is 1.06 times less risky than SPDR Russell. It trades about 0.16 of its potential returns per unit of risk. SPDR Russell 1000 is currently generating about 0.14 per unit of risk. If you would invest 8,075 in iShares Russell Mid Cap on September 1, 2024 and sell it today you would earn a total of 1,472 from holding iShares Russell Mid Cap or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell Mid Cap vs. SPDR Russell 1000
Performance |
| Timeline |
| iShares Russell Mid |
| SPDR Russell 1000 |
IShares Russell and SPDR Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and SPDR Russell
The main advantage of trading using opposite IShares Russell and SPDR Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, SPDR Russell 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 Russell will offset losses from the drop in SPDR Russell's long position.| IShares Russell vs. iShares Small Cap | IShares Russell vs. Invesco ESG NASDAQ | IShares Russell vs. Invesco ESG NASDAQ | IShares Russell vs. BlackRock Carbon Transition |
| SPDR Russell vs. iShares Small Cap | SPDR Russell vs. Invesco ESG NASDAQ | SPDR Russell vs. Invesco ESG NASDAQ | SPDR Russell vs. BlackRock Carbon Transition |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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