Correlation Between SPDR MSCI and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and SPDR SP 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 SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Europe and SPDR SP Dividend, you can compare the effects of market volatilities on SPDR MSCI and SPDR SP 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 SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and SPDR SP.
Diversification Opportunities for SPDR MSCI and SPDR SP
Excellent diversification
The 3 months correlation between SPDR and SPDR is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Europe and SPDR SP Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Dividend 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 Europe are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Dividend has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR MSCI and SPDR SP
Assuming the 90 days trading horizon SPDR MSCI Europe is expected to under-perform the SPDR SP. But the etf apears to be less risky and, when comparing its historical volatility, SPDR MSCI Europe is 1.1 times less risky than SPDR SP. The etf trades about -0.13 of its potential returns per unit of risk. The SPDR SP Dividend is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,963 in SPDR SP Dividend on August 28, 2024 and sell it today you would earn a total of 337.00 from holding SPDR SP Dividend or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI Europe vs. SPDR SP Dividend
Performance |
| Timeline |
| SPDR MSCI Europe |
| SPDR SP Dividend |
SPDR MSCI and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and SPDR SP
The main advantage of trading using opposite SPDR MSCI and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| SPDR MSCI vs. SPDR Dow Jones | SPDR MSCI vs. SPDR SP Dividend | SPDR MSCI vs. SPDR Barclays Euro | SPDR MSCI vs. SPDR SP Consumer |
| SPDR SP vs. Leverage Shares 3x | SPDR SP vs. WisdomTree SP 500 | SPDR SP vs. WisdomTree Silver 3x | SPDR SP vs. Leverage Shares 3x |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |