Correlation Between SPDR MSCI and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI 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 SPDR MSCI and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI EAFE and SPDR MSCI Emerging, you can compare the effects of market volatilities on SPDR MSCI 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 SPDR MSCI with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and SPDR MSCI.
Diversification Opportunities for SPDR MSCI and SPDR MSCI
Modest diversification
The 3 months correlation between SPDR and SPDR is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI EAFE and SPDR MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Emerging and SPDR MSCI 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 MSCI EAFE 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 Emerging has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and SPDR MSCI go up and down completely randomly.
Pair Corralation between SPDR MSCI and SPDR MSCI
Given the investment horizon of 90 days SPDR MSCI EAFE is expected to generate 0.82 times more return on investment than SPDR MSCI. However, SPDR MSCI EAFE is 1.22 times less risky than SPDR MSCI. It trades about -0.02 of its potential returns per unit of risk. SPDR MSCI Emerging is currently generating about -0.11 per unit of risk. If you would invest 7,640 in SPDR MSCI EAFE on September 1, 2024 and sell it today you would lose (26.00) from holding SPDR MSCI EAFE or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR MSCI EAFE vs. SPDR MSCI Emerging
Performance |
| Timeline |
| SPDR MSCI EAFE |
| SPDR MSCI Emerging |
SPDR MSCI and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and SPDR MSCI
The main advantage of trading using opposite SPDR MSCI and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI 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.| SPDR MSCI vs. iShares ESG Aggregate | SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. Aquagold International | SPDR MSCI vs. Thrivent High Yield |
| SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR DoubleLine Emerging | SPDR MSCI 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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