Correlation Between NYSE Composite and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SPDR MSCI 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 NYSE Composite and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SPDR MSCI EAFE, you can compare the effects of market volatilities on NYSE Composite and SPDR MSCI 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 NYSE Composite with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SPDR MSCI.
Diversification Opportunities for NYSE Composite and SPDR MSCI
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and SPDR is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SPDR MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI EAFE and NYSE Composite 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 NYSE Composite are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI EAFE has no effect on the direction of NYSE Composite i.e., NYSE Composite and SPDR MSCI go up and down completely randomly.
Pair Corralation between NYSE Composite and SPDR MSCI
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the SPDR MSCI. In addition to that, NYSE Composite is 1.18 times more volatile than SPDR MSCI EAFE. It trades about -0.05 of its total potential returns per unit of risk. SPDR MSCI EAFE is currently generating about -0.05 per unit of volatility. If you would invest 7,935 in SPDR MSCI EAFE on January 12, 2025 and sell it today you would lose (223.00) from holding SPDR MSCI EAFE or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. SPDR MSCI EAFE
Performance |
| Timeline |
NYSE Composite and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SPDR MSCI EAFE
Pair trading matchups for SPDR MSCI
Pair Trading with NYSE Composite and SPDR MSCI
The main advantage of trading using opposite NYSE Composite and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI's long position.| NYSE Composite vs. Kulicke and Soffa | NYSE Composite vs. Tigo Energy | NYSE Composite vs. Lipocine | NYSE Composite vs. Radcom |
| SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR MSCI USA | SPDR MSCI vs. SPDR MSCI World | SPDR MSCI vs. SPDR SSGA Large |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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