Correlation Between Barclays Capital and SPDR STOXX
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and SPDR STOXX 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 Barclays Capital and SPDR STOXX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays Capital and SPDR STOXX Europe, you can compare the effects of market volatilities on Barclays Capital and SPDR STOXX 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 Barclays Capital with a short position of SPDR STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and SPDR STOXX.
Diversification Opportunities for Barclays Capital and SPDR STOXX
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barclays and SPDR is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and SPDR STOXX Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR STOXX Europe and Barclays Capital 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 Barclays Capital are associated (or correlated) with SPDR STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR STOXX Europe has no effect on the direction of Barclays Capital i.e., Barclays Capital and SPDR STOXX go up and down completely randomly.
Pair Corralation between Barclays Capital and SPDR STOXX
Considering the 90-day investment horizon Barclays Capital is expected to generate 216.58 times more return on investment than SPDR STOXX. However, Barclays Capital is 216.58 times more volatile than SPDR STOXX Europe. It trades about 0.18 of its potential returns per unit of risk. SPDR STOXX Europe is currently generating about 0.04 per unit of risk. If you would invest 99.00 in Barclays Capital on August 28, 2024 and sell it today you would earn a total of 7,263 from holding Barclays Capital or generate 7336.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 32.73% |
| Values | Daily Returns |
Barclays Capital vs. SPDR STOXX Europe
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPDR STOXX Europe |
Barclays Capital and SPDR STOXX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and SPDR STOXX
The main advantage of trading using opposite Barclays Capital and SPDR STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, SPDR STOXX 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 STOXX will offset losses from the drop in SPDR STOXX's long position.| Barclays Capital vs. Aquagold International | Barclays Capital vs. Morningstar Unconstrained Allocation | Barclays Capital vs. High Yield Municipal Fund | Barclays Capital vs. Thrivent High Yield |
| SPDR STOXX vs. SPDR Bloomberg Barclays | SPDR STOXX vs. SPDR Kensho Future | SPDR STOXX vs. SPDR Kensho Intelligent | SPDR STOXX vs. SPDR SP Kensho |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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