Correlation Between SPDR Dow and FlexShares International
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and FlexShares International 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 Dow and FlexShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and FlexShares International Quality, you can compare the effects of market volatilities on SPDR Dow and FlexShares International 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 Dow with a short position of FlexShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and FlexShares International.
Diversification Opportunities for SPDR Dow and FlexShares International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and FlexShares is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and FlexShares International Quali in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares International and SPDR Dow 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 Dow Jones are associated (or correlated) with FlexShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares International has no effect on the direction of SPDR Dow i.e., SPDR Dow and FlexShares International go up and down completely randomly.
Pair Corralation between SPDR Dow and FlexShares International
Considering the 90-day investment horizon SPDR Dow is expected to generate 1.61 times less return on investment than FlexShares International. In addition to that, SPDR Dow is 1.07 times more volatile than FlexShares International Quality. It trades about 0.03 of its total potential returns per unit of risk. FlexShares International Quality is currently generating about 0.06 per unit of volatility. If you would invest 2,521 in FlexShares International Quality on September 12, 2024 and sell it today you would earn a total of 459.00 from holding FlexShares International Quality or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. FlexShares International Quali
Performance |
| Timeline |
| SPDR Dow Jones |
| FlexShares International |
SPDR Dow and FlexShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and FlexShares International
The main advantage of trading using opposite SPDR Dow and FlexShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, FlexShares International 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 FlexShares International will offset losses from the drop in FlexShares International's long position.| SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. iShares International Developed | SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. SPDR SP Emerging |
| FlexShares International vs. Global X MSCI | FlexShares International vs. Global X Alternative | FlexShares International vs. First Trust Intl | FlexShares International vs. iShares AsiaPacific 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |