Correlation Between SPDR Dow and IShares Real
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and IShares Real 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 Real 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 Real Estate, you can compare the effects of market volatilities on SPDR Dow and IShares Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and IShares Real.
Diversification Opportunities for SPDR Dow and IShares Real
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and iShares Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Real Estate has no effect on the direction of SPDR Dow i.e., SPDR Dow and IShares Real go up and down completely randomly.
Pair Corralation between SPDR Dow and IShares Real
Considering the 90-day investment horizon SPDR Dow is expected to generate 1.38 times less return on investment than IShares Real. In addition to that, SPDR Dow is 1.01 times more volatile than iShares Real Estate. It trades about 0.08 of its total potential returns per unit of risk. iShares Real Estate is currently generating about 0.11 per unit of volatility. If you would invest 9,229 in iShares Real Estate on November 3, 2024 and sell it today you would earn a total of 253.00 from holding iShares Real Estate or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPDR Dow Jones vs. iShares Real Estate
Performance |
| Timeline |
| SPDR Dow Jones |
| iShares Real Estate |
SPDR Dow and IShares Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and IShares Real
The main advantage of trading using opposite SPDR Dow and IShares Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, IShares Real 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 Real will offset losses from the drop in IShares Real'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 Real vs. iShares Cohen Steers | IShares Real vs. iShares Basic Materials | IShares Real vs. SPDR Dow Jones | IShares Real vs. iShares Telecommunications 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |