Correlation Between SPDR SPASX and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and Vanguard Total 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 Vanguard Total 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 Vanguard Total Market, you can compare the effects of market volatilities on SPDR SPASX and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and Vanguard Total.
Diversification Opportunities for SPDR SPASX and Vanguard Total
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between SPDR and Vanguard is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and Vanguard Total Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Market 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Market has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and Vanguard Total go up and down completely randomly.
Pair Corralation between SPDR SPASX and Vanguard Total
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to generate 1.77 times more return on investment than Vanguard Total. However, SPDR SPASX is 1.77 times more volatile than Vanguard Total Market. It trades about 0.11 of its potential returns per unit of risk. Vanguard Total Market is currently generating about 0.18 per unit of risk. If you would invest 1,002 in SPDR SPASX 200 on August 25, 2024 and sell it today you would earn a total of 379.00 from holding SPDR SPASX 200 or generate 37.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SPASX 200 vs. Vanguard Total Market
Performance |
| Timeline |
| SPDR SPASX 200 |
| Vanguard Total Market |
SPDR SPASX and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and Vanguard Total
The main advantage of trading using opposite SPDR SPASX and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
| Vanguard Total vs. BetaShares Global Banks | Vanguard Total vs. Beta Shares SPASX | Vanguard Total vs. SPDR SPASX 200 | Vanguard Total vs. Vanguard Australian Property |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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