Correlation Between SPDR Series and Vaneck Vectors
Can any of the company-specific risk be diversified away by investing in both SPDR Series and Vaneck Vectors 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 SPDR Series and Vaneck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Series Trust and Vaneck Vectors Investment, you can compare the effects of market volatilities on SPDR Series and Vaneck Vectors 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 SPDR Series with a short position of Vaneck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and Vaneck Vectors.
Diversification Opportunities for SPDR Series and Vaneck Vectors
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Vaneck is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and Vaneck Vectors Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Vectors Investment and SPDR Series 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 SPDR Series Trust are associated (or correlated) with Vaneck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Vectors Investment has no effect on the direction of SPDR Series i.e., SPDR Series and Vaneck Vectors go up and down completely randomly.
Pair Corralation between SPDR Series and Vaneck Vectors
Assuming the 90 days trading horizon SPDR Series Trust is expected to generate 10.21 times more return on investment than Vaneck Vectors. However, SPDR Series is 10.21 times more volatile than Vaneck Vectors Investment. It trades about 0.2 of its potential returns per unit of risk. Vaneck Vectors Investment is currently generating about 0.2 per unit of risk. If you would invest 153,170 in SPDR Series Trust on September 3, 2024 and sell it today you would earn a total of 46,980 from holding SPDR Series Trust or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR Series Trust vs. Vaneck Vectors Investment
Performance |
| Timeline |
| SPDR Series Trust |
| Vaneck Vectors Investment |
SPDR Series and Vaneck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and Vaneck Vectors
The main advantage of trading using opposite SPDR Series and Vaneck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series position performs unexpectedly, Vaneck Vectors 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 Vaneck Vectors will offset losses from the drop in Vaneck Vectors' long position.| SPDR Series vs. SPDR Dow Jones | SPDR Series vs. SPDR Gold Trust | SPDR Series vs. SPDR SP 500 | SPDR Series vs. SPDR Series Trust |
| Vaneck Vectors vs. The Select Sector | Vaneck Vectors vs. Promotora y Operadora | Vaneck Vectors vs. iShares Global Timber | Vaneck Vectors vs. SPDR Series Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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