Correlation Between Barclays Capital and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Barclays Capital 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 Barclays Capital and SPDR SP 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 SP 1500, you can compare the effects of market volatilities on Barclays Capital 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 Barclays Capital with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays Capital and SPDR SP.
Diversification Opportunities for Barclays Capital and SPDR SP
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barclays and SPDR is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital and SPDR SP 1500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 1500 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 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 1500 has no effect on the direction of Barclays Capital i.e., Barclays Capital and SPDR SP go up and down completely randomly.
Pair Corralation between Barclays Capital and SPDR SP
If you would invest 18,315 in SPDR SP 1500 on September 1, 2024 and sell it today you would earn a total of 1,254 from holding SPDR SP 1500 or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Barclays Capital vs. SPDR SP 1500
Performance |
| Timeline |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPDR SP 1500 |
Barclays Capital and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays Capital and SPDR SP
The main advantage of trading using opposite Barclays Capital and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital 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.The idea behind Barclays Capital and SPDR SP 1500 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 SP vs. iShares Core SP | SPDR SP vs. iShares Core MSCI | SPDR SP vs. iShares Broad USD | SPDR SP vs. iShares Core SP |
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.
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