Correlation Between SPDR Dow and IShares Cohen
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and IShares Cohen 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 IShares Cohen 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 iShares Cohen Steers, you can compare the effects of market volatilities on SPDR Dow and IShares Cohen 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 IShares Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and IShares Cohen.
Diversification Opportunities for SPDR Dow and IShares Cohen
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and IShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and iShares Cohen Steers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Cohen Steers 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 IShares Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Cohen Steers has no effect on the direction of SPDR Dow i.e., SPDR Dow and IShares Cohen go up and down completely randomly.
Pair Corralation between SPDR Dow and IShares Cohen
Considering the 90-day investment horizon SPDR Dow Jones is expected to generate 1.06 times more return on investment than IShares Cohen. However, SPDR Dow is 1.06 times more volatile than iShares Cohen Steers. It trades about 0.14 of its potential returns per unit of risk. iShares Cohen Steers is currently generating about 0.1 per unit of risk. If you would invest 9,844 in SPDR Dow Jones on November 18, 2024 and sell it today you would earn a total of 277.00 from holding SPDR Dow Jones or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. iShares Cohen Steers
Performance |
| Timeline |
| SPDR Dow Jones |
| iShares Cohen Steers |
SPDR Dow and IShares Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and IShares Cohen
The main advantage of trading using opposite SPDR Dow and IShares Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, IShares Cohen 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 IShares Cohen will offset losses from the drop in IShares Cohen's long position.| SPDR Dow vs. iShares Cohen Steers | SPDR Dow vs. iShares Real Estate | SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. iShares Utilities ETF |
| IShares Cohen vs. SPDR Dow Jones | IShares Cohen vs. iShares Real Estate | IShares Cohen vs. iShares North American | IShares Cohen vs. iShares Utilities ETF |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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