Correlation Between SPDR Russell and SPDR Russell
Can any of the company-specific risk be diversified away by investing in both SPDR 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 SPDR 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 SPDR Russell 1000 and SPDR Russell 1000, you can compare the effects of market volatilities on SPDR 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 SPDR Russell with a short position of SPDR Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and SPDR Russell.
Diversification Opportunities for SPDR Russell and SPDR Russell
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 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 SPDR 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 SPDR Russell 1000 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 SPDR Russell i.e., SPDR Russell and SPDR Russell go up and down completely randomly.
Pair Corralation between SPDR Russell and SPDR Russell
Given the investment horizon of 90 days SPDR Russell 1000 is expected to generate 1.16 times more return on investment than SPDR Russell. However, SPDR Russell is 1.16 times more volatile than SPDR Russell 1000. It trades about 0.13 of its potential returns per unit of risk. SPDR Russell 1000 is currently generating about 0.12 per unit of risk. If you would invest 11,015 in SPDR Russell 1000 on August 25, 2024 and sell it today you would earn a total of 1,689 from holding SPDR Russell 1000 or generate 15.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Russell 1000 vs. SPDR Russell 1000
Performance |
| Timeline |
| SPDR Russell 1000 |
| SPDR Russell 1000 |
SPDR Russell and SPDR Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and SPDR Russell
The main advantage of trading using opposite SPDR Russell and SPDR Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR 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.| SPDR Russell vs. Vanguard Mid Cap Index | SPDR Russell vs. Vanguard Extended Market | SPDR Russell vs. iShares Core SP | SPDR Russell vs. SPDR SP MIDCAP |
| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR SP 400 | SPDR Russell vs. SPDR MSCI EAFE |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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