Correlation Between SPDR Russell and VanEck Agribusiness
Can any of the company-specific risk be diversified away by investing in both SPDR Russell and VanEck Agribusiness 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 VanEck Agribusiness 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 VanEck Agribusiness ETF, you can compare the effects of market volatilities on SPDR Russell and VanEck Agribusiness 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 VanEck Agribusiness. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and VanEck Agribusiness.
Diversification Opportunities for SPDR Russell and VanEck Agribusiness
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and VanEck is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and VanEck Agribusiness ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Agribusiness ETF 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 VanEck Agribusiness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Agribusiness ETF has no effect on the direction of SPDR Russell i.e., SPDR Russell and VanEck Agribusiness go up and down completely randomly.
Pair Corralation between SPDR Russell and VanEck Agribusiness
Given the investment horizon of 90 days SPDR Russell 1000 is expected to generate 0.91 times more return on investment than VanEck Agribusiness. However, SPDR Russell 1000 is 1.1 times less risky than VanEck Agribusiness. It trades about 0.09 of its potential returns per unit of risk. VanEck Agribusiness ETF is currently generating about -0.02 per unit of risk. If you would invest 8,897 in SPDR Russell 1000 on September 2, 2024 and sell it today you would earn a total of 2,839 from holding SPDR Russell 1000 or generate 31.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Russell 1000 vs. VanEck Agribusiness ETF
Performance |
| Timeline |
| SPDR Russell 1000 |
| VanEck Agribusiness ETF |
SPDR Russell and VanEck Agribusiness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and VanEck Agribusiness
The main advantage of trading using opposite SPDR Russell and VanEck Agribusiness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell position performs unexpectedly, VanEck Agribusiness 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 VanEck Agribusiness will offset losses from the drop in VanEck Agribusiness' long position.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR SP 400 | SPDR Russell vs. SPDR MSCI EAFE |
| VanEck Agribusiness vs. Invesco DB Agriculture | VanEck Agribusiness vs. Invesco DB Commodity | VanEck Agribusiness vs. VanEck Steel ETF | VanEck Agribusiness vs. SPDR SP Metals |
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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