Correlation Between DBX ETF and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both DBX ETF 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 DBX ETF and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBX ETF Trust and SPDR MSCI USA, you can compare the effects of market volatilities on DBX ETF 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 DBX ETF with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBX ETF and SPDR MSCI.
Diversification Opportunities for DBX ETF and SPDR MSCI
Almost no diversification
The 3 months correlation between DBX and SPDR is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust and SPDR MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI USA and DBX ETF 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 DBX ETF Trust 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 USA has no effect on the direction of DBX ETF i.e., DBX ETF and SPDR MSCI go up and down completely randomly.
Pair Corralation between DBX ETF and SPDR MSCI
Given the investment horizon of 90 days DBX ETF Trust is expected to generate 0.96 times more return on investment than SPDR MSCI. However, DBX ETF Trust is 1.05 times less risky than SPDR MSCI. It trades about 0.43 of its potential returns per unit of risk. SPDR MSCI USA is currently generating about 0.37 per unit of risk. If you would invest 5,154 in DBX ETF Trust on September 3, 2024 and sell it today you would earn a total of 309.00 from holding DBX ETF Trust or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBX ETF Trust vs. SPDR MSCI USA
Performance |
| Timeline |
| DBX ETF Trust |
| SPDR MSCI USA |
DBX ETF and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBX ETF and SPDR MSCI
The main advantage of trading using opposite DBX ETF and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF 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.| DBX ETF vs. SPDR MSCI USA | DBX ETF vs. American Century STOXX | DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. PIMCO RAFI Dynamic |
| SPDR MSCI vs. Vanguard Total Stock | SPDR MSCI vs. SPDR SP 500 | SPDR MSCI vs. iShares Core SP | SPDR MSCI vs. Vanguard Dividend Appreciation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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