Correlation Between Barclays Capital and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Barclays Capital and SPDR Portfolio 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 Portfolio 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 Portfolio Europe, you can compare the effects of market volatilities on Barclays Capital and SPDR Portfolio 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 Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and SPDR Portfolio.
Diversification Opportunities for Barclays Capital and SPDR Portfolio
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barclays and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and SPDR Portfolio Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio 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 Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Europe has no effect on the direction of Barclays Capital i.e., Barclays Capital and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Barclays Capital and SPDR Portfolio
If you would invest 3,967 in SPDR Portfolio Europe on November 3, 2024 and sell it today you would earn a total of 303.00 from holding SPDR Portfolio Europe or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Barclays Capital vs. SPDR Portfolio Europe
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPDR Portfolio Europe |
Barclays Capital and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and SPDR Portfolio
The main advantage of trading using opposite Barclays Capital and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.The idea behind Barclays Capital and SPDR Portfolio Europe pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SPDR Portfolio vs. Franklin FTSE Europe | SPDR Portfolio vs. SPDR Portfolio MSCI | SPDR Portfolio vs. iShares Core MSCI | SPDR Portfolio vs. JPMorgan BetaBuilders Europe |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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