Correlation Between DBX ETF and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both DBX ETF and SPDR Portfolio 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 DBX ETF and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBX ETF Trust and SPDR Portfolio Aggregate, you can compare the effects of market volatilities on DBX ETF and SPDR Portfolio 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 DBX ETF with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBX ETF and SPDR Portfolio.
Diversification Opportunities for DBX ETF and SPDR Portfolio
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DBX and SPDR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust and SPDR Portfolio Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Aggregate and DBX ETF 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 DBX ETF Trust are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Aggregate has no effect on the direction of DBX ETF i.e., DBX ETF and SPDR Portfolio go up and down completely randomly.
Pair Corralation between DBX ETF and SPDR Portfolio
Given the investment horizon of 90 days DBX ETF Trust is expected to generate 1.89 times more return on investment than SPDR Portfolio. However, DBX ETF is 1.89 times more volatile than SPDR Portfolio Aggregate. It trades about 0.04 of its potential returns per unit of risk. SPDR Portfolio Aggregate is currently generating about 0.04 per unit of risk. If you would invest 2,418 in DBX ETF Trust on September 12, 2024 and sell it today you would earn a total of 335.80 from holding DBX ETF Trust or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBX ETF Trust vs. SPDR Portfolio Aggregate
Performance |
| Timeline |
| DBX ETF Trust |
| SPDR Portfolio Aggregate |
DBX ETF and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBX ETF and SPDR Portfolio
The main advantage of trading using opposite DBX ETF and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.| DBX ETF vs. SPDR Portfolio Aggregate | DBX ETF vs. WBI Power Factor | DBX ETF vs. Global X MSCI | DBX ETF vs. HUMANA INC |
| SPDR Portfolio vs. ClearShares Ultra Short Maturity | SPDR Portfolio vs. PGIM Active High | SPDR Portfolio vs. Pacer Trendpilot Bond | SPDR Portfolio vs. Pacer Lunt Large |
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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