Correlation Between SPDR SPASX and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and IShares MSCI 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 SPASX and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and iShares MSCI Emerging, you can compare the effects of market volatilities on SPDR SPASX and IShares MSCI 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 SPASX with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and IShares MSCI.
Diversification Opportunities for SPDR SPASX and IShares MSCI
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and IShares is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and iShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Emerging and SPDR SPASX 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 SPASX 200 are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Emerging has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and IShares MSCI go up and down completely randomly.
Pair Corralation between SPDR SPASX and IShares MSCI
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 2.73 times more return on investment than IShares MSCI. However, SPDR SPASX is 2.73 times more volatile than iShares MSCI Emerging. It trades about 0.12 of its potential returns per unit of risk. iShares MSCI Emerging is currently generating about -0.27 per unit of risk. If you would invest 1,368 in SPDR SPASX 200 on September 3, 2024 and sell it today you would earn a total of 41.00 from holding SPDR SPASX 200 or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. iShares MSCI Emerging
Performance |
| Timeline |
| SPDR SPASX 200 |
| iShares MSCI Emerging |
SPDR SPASX and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and IShares MSCI
The main advantage of trading using opposite SPDR SPASX and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI's long position.| SPDR SPASX vs. Betashares Asia Technology | SPDR SPASX vs. CD Private Equity | SPDR SPASX vs. BetaShares Australia 200 | SPDR SPASX vs. Australian High Interest |
| IShares MSCI vs. iShares Global Aggregate | IShares MSCI vs. iShares CoreSP MidCap | IShares MSCI vs. iShares SP 500 | IShares MSCI vs. iShares Core MSCI |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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