Correlation Between SPDR SPASX and VanEck FTSE
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and VanEck FTSE 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 VanEck FTSE 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 VanEck FTSE Global, you can compare the effects of market volatilities on SPDR SPASX and VanEck FTSE 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 VanEck FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and VanEck FTSE.
Diversification Opportunities for SPDR SPASX and VanEck FTSE
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and VanEck is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and VanEck FTSE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck FTSE Global 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 VanEck FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck FTSE Global has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and VanEck FTSE go up and down completely randomly.
Pair Corralation between SPDR SPASX and VanEck FTSE
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to under-perform the VanEck FTSE. In addition to that, SPDR SPASX is 1.65 times more volatile than VanEck FTSE Global. It trades about -0.02 of its total potential returns per unit of risk. VanEck FTSE Global is currently generating about 0.13 per unit of volatility. If you would invest 2,213 in VanEck FTSE Global on September 3, 2024 and sell it today you would earn a total of 75.00 from holding VanEck FTSE Global or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. VanEck FTSE Global
Performance |
| Timeline |
| SPDR SPASX 200 |
| VanEck FTSE Global |
SPDR SPASX and VanEck FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and VanEck FTSE
The main advantage of trading using opposite SPDR SPASX and VanEck FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, VanEck FTSE 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 VanEck FTSE will offset losses from the drop in VanEck FTSE'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 |
| VanEck FTSE vs. VanEck Vectors Australian | VanEck FTSE vs. VanEck FTSE China | VanEck FTSE vs. VanEck MSCI International | VanEck FTSE vs. VanEck Global Clean |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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