Correlation Between SPDR Dow and IShares Environmentally
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and IShares Environmentally 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 Environmentally 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 Environmentally Aware, you can compare the effects of market volatilities on SPDR Dow and IShares Environmentally 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 Environmentally. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and IShares Environmentally.
Diversification Opportunities for SPDR Dow and IShares Environmentally
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and iShares Environmentally Aware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Environmentally 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 Environmentally. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Environmentally has no effect on the direction of SPDR Dow i.e., SPDR Dow and IShares Environmentally go up and down completely randomly.
Pair Corralation between SPDR Dow and IShares Environmentally
Considering the 90-day investment horizon SPDR Dow Jones is expected to under-perform the IShares Environmentally. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Dow Jones is 1.06 times less risky than IShares Environmentally. The etf trades about -0.01 of its potential returns per unit of risk. The iShares Environmentally Aware is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,463 in iShares Environmentally Aware on November 2, 2024 and sell it today you would earn a total of 101.00 from holding iShares Environmentally Aware or generate 4.1% 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 Environmentally Aware
Performance |
| Timeline |
| SPDR Dow Jones |
| iShares Environmentally |
SPDR Dow and IShares Environmentally Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and IShares Environmentally
The main advantage of trading using opposite SPDR Dow and IShares Environmentally positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, IShares Environmentally 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 Environmentally will offset losses from the drop in IShares Environmentally's long position.| SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. SPDR Dow Jones | SPDR Dow vs. SPDR SP International | SPDR Dow vs. iShares Cohen Steers |
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
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| CEOs Directory Screen CEOs from public companies around the world |