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 USA, 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
Very good diversification
The 3 months correlation between SPDR and SPDR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI EAFE 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 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 USA 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 under-perform the SPDR MSCI. In addition to that, SPDR MSCI is 1.06 times more volatile than SPDR MSCI USA. It trades about -0.19 of its total potential returns per unit of risk. SPDR MSCI USA is currently generating about 0.15 per unit of volatility. If you would invest 15,809 in SPDR MSCI USA on August 25, 2024 and sell it today you would earn a total of 383.00 from holding SPDR MSCI USA or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI EAFE vs. SPDR MSCI USA
Performance |
| Timeline |
| SPDR MSCI EAFE |
| SPDR MSCI USA |
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. SPDR MSCI Emerging | SPDR MSCI vs. SPDR MSCI USA | SPDR MSCI vs. SPDR MSCI World | SPDR MSCI vs. SPDR SSGA Large |
| SPDR MSCI vs. SPDR SSGA Large | SPDR MSCI vs. SPDR MSCI EAFE | SPDR MSCI vs. SPDR MSCI Emerging | SPDR MSCI vs. SPDR Russell 1000 |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |