Correlation Between SPDR Russell and IShares Small
Can any of the company-specific risk be diversified away by investing in both SPDR Russell and IShares Small 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 IShares Small 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 iShares Small Cap, you can compare the effects of market volatilities on SPDR Russell and IShares Small 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 IShares Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and IShares Small.
Diversification Opportunities for SPDR Russell and IShares Small
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and iShares Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Small Cap 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 IShares Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Small Cap has no effect on the direction of SPDR Russell i.e., SPDR Russell and IShares Small go up and down completely randomly.
Pair Corralation between SPDR Russell and IShares Small
Given the investment horizon of 90 days SPDR Russell 1000 is expected to generate 0.61 times more return on investment than IShares Small. However, SPDR Russell 1000 is 1.64 times less risky than IShares Small. It trades about 0.08 of its potential returns per unit of risk. iShares Small Cap is currently generating about 0.04 per unit of risk. If you would invest 9,376 in SPDR Russell 1000 on September 3, 2024 and sell it today you would earn a total of 3,438 from holding SPDR Russell 1000 or generate 36.67% 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. iShares Small Cap
Performance |
| Timeline |
| SPDR Russell 1000 |
| iShares Small Cap |
SPDR Russell and IShares Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and IShares Small
The main advantage of trading using opposite SPDR Russell and IShares Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell position performs unexpectedly, IShares Small 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 IShares Small will offset losses from the drop in IShares Small's long position.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR MSCI EAFE | SPDR Russell vs. SPDR SSGA Small |
| IShares Small vs. Horizon Kinetics Inflation | IShares Small vs. Virtus ETF Trust | IShares Small vs. iShares MSCI USA | IShares Small vs. Pacer Cash Cows |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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