Correlation Between SPDR Bloomberg and VanEck Fallen
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and VanEck Fallen 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 Bloomberg and VanEck Fallen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg High and VanEck Fallen Angel, you can compare the effects of market volatilities on SPDR Bloomberg and VanEck Fallen 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 Bloomberg with a short position of VanEck Fallen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and VanEck Fallen.
Diversification Opportunities for SPDR Bloomberg and VanEck Fallen
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and VanEck is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg High and VanEck Fallen Angel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Fallen Angel and SPDR Bloomberg 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 Bloomberg High are associated (or correlated) with VanEck Fallen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Fallen Angel has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and VanEck Fallen go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and VanEck Fallen
Considering the 90-day investment horizon SPDR Bloomberg is expected to generate 1.27 times less return on investment than VanEck Fallen. In addition to that, SPDR Bloomberg is 1.09 times more volatile than VanEck Fallen Angel. It trades about 0.22 of its total potential returns per unit of risk. VanEck Fallen Angel is currently generating about 0.3 per unit of volatility. If you would invest 2,854 in VanEck Fallen Angel on November 9, 2024 and sell it today you would earn a total of 45.00 from holding VanEck Fallen Angel or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg High vs. VanEck Fallen Angel
Performance |
| Timeline |
| SPDR Bloomberg High |
| VanEck Fallen Angel |
SPDR Bloomberg and VanEck Fallen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and VanEck Fallen
The main advantage of trading using opposite SPDR Bloomberg and VanEck Fallen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, VanEck Fallen 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 Fallen will offset losses from the drop in VanEck Fallen's long position.| SPDR Bloomberg vs. iShares iBoxx High | SPDR Bloomberg vs. iShares iBoxx Investment | SPDR Bloomberg vs. iShares JP Morgan | SPDR Bloomberg vs. iShares TIPS Bond |
| VanEck Fallen vs. iShares Fallen Angels | VanEck Fallen vs. VanEck Emerging Markets | VanEck Fallen vs. First Trust Multi Asset | VanEck Fallen vs. iShares 0 5 Year |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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