Correlation Between Xtrackers MSCI and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and SPDR Portfolio 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 Xtrackers MSCI and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI Kokusai and SPDR Portfolio MSCI, you can compare the effects of market volatilities on Xtrackers MSCI and SPDR Portfolio 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 Xtrackers MSCI with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and SPDR Portfolio.
Diversification Opportunities for Xtrackers MSCI and SPDR Portfolio
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and SPDR is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI Kokusai and SPDR Portfolio MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio MSCI and Xtrackers MSCI 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 Xtrackers MSCI Kokusai are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio MSCI has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and SPDR Portfolio
Given the investment horizon of 90 days Xtrackers MSCI Kokusai is expected to generate 0.93 times more return on investment than SPDR Portfolio. However, Xtrackers MSCI Kokusai is 1.07 times less risky than SPDR Portfolio. It trades about 0.35 of its potential returns per unit of risk. SPDR Portfolio MSCI is currently generating about 0.29 per unit of risk. If you would invest 9,954 in Xtrackers MSCI Kokusai on September 2, 2024 and sell it today you would earn a total of 451.00 from holding Xtrackers MSCI Kokusai or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI Kokusai vs. SPDR Portfolio MSCI
Performance |
| Timeline |
| Xtrackers MSCI Kokusai |
| SPDR Portfolio MSCI |
Xtrackers MSCI and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and SPDR Portfolio
The main advantage of trading using opposite Xtrackers MSCI and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Xtrackers MSCI vs. FT Vest Equity | Xtrackers MSCI vs. Northern Lights | Xtrackers MSCI vs. Dimensional International High | Xtrackers MSCI vs. Matthews China Discovery |
| SPDR Portfolio vs. WisdomTree Interest Rate | SPDR Portfolio vs. First Trust Developed | SPDR Portfolio vs. VictoryShares International Volatility | SPDR Portfolio vs. Aquagold International |
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 Stocks Directory module to find actively traded stocks across global markets.
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