Correlation Between SPDR Bloomberg and IShares International
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and IShares International 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 Bloomberg and IShares International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg Short and iShares International High, you can compare the effects of market volatilities on SPDR Bloomberg and IShares International 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 Bloomberg with a short position of IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and IShares International.
Diversification Opportunities for SPDR Bloomberg and IShares International
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and IShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Short and iShares International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International and SPDR Bloomberg 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 Bloomberg Short are associated (or correlated) with IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and IShares International go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and IShares International
Given the investment horizon of 90 days SPDR Bloomberg Short is expected to generate 0.35 times more return on investment than IShares International. However, SPDR Bloomberg Short is 2.85 times less risky than IShares International. It trades about 0.17 of its potential returns per unit of risk. iShares International High is currently generating about -0.34 per unit of risk. If you would invest 2,538 in SPDR Bloomberg Short on August 27, 2024 and sell it today you would earn a total of 16.00 from holding SPDR Bloomberg Short or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg Short vs. iShares International High
Performance |
| Timeline |
| SPDR Bloomberg Short |
| iShares International |
SPDR Bloomberg and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and IShares International
The main advantage of trading using opposite SPDR Bloomberg and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, IShares International 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 International will offset losses from the drop in IShares International's long position.| SPDR Bloomberg vs. First Trust Senior | SPDR Bloomberg vs. First Trust Low | SPDR Bloomberg vs. First Trust Enhanced | SPDR Bloomberg vs. First Trust TCW |
| IShares International vs. iShares Intl High | IShares International vs. iShares JP Morgan | IShares International vs. VanEck International High | IShares International vs. iShares JP Morgan |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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