Correlation Between SPDR Russell and Global X
Can any of the company-specific risk be diversified away by investing in both SPDR Russell and Global X 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 Global X 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 Global X Adaptive, you can compare the effects of market volatilities on SPDR Russell and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Global X.
Diversification Opportunities for SPDR Russell and Global X
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Global is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Global X Adaptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Adaptive 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Adaptive has no effect on the direction of SPDR Russell i.e., SPDR Russell and Global X go up and down completely randomly.
Pair Corralation between SPDR Russell and Global X
Given the investment horizon of 90 days SPDR Russell is expected to generate 1.47 times less return on investment than Global X. In addition to that, SPDR Russell is 1.14 times more volatile than Global X Adaptive. It trades about 0.07 of its total potential returns per unit of risk. Global X Adaptive is currently generating about 0.11 per unit of volatility. If you would invest 2,989 in Global X Adaptive on August 30, 2024 and sell it today you would earn a total of 1,520 from holding Global X Adaptive or generate 50.85% 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. Global X Adaptive
Performance |
| Timeline |
| SPDR Russell 1000 |
| Global X Adaptive |
SPDR Russell and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and Global X
The main advantage of trading using opposite SPDR Russell and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| SPDR Russell vs. Vanguard Mid Cap Value | SPDR Russell vs. SPDR SP Dividend | SPDR Russell vs. Pacer Cash Cows | SPDR Russell vs. WisdomTree MidCap Dividend |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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