Correlation Between SPDR Portfolio and Global X
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and Global X 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 Portfolio and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Aggregate and Global X Adaptive, you can compare the effects of market volatilities on SPDR Portfolio and Global X 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 Portfolio with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Global X.
Diversification Opportunities for SPDR Portfolio and Global X
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and Global is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Aggregate and Global X Adaptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Adaptive and SPDR Portfolio 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 Portfolio Aggregate are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Adaptive has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Global X go up and down completely randomly.
Pair Corralation between SPDR Portfolio and Global X
Given the investment horizon of 90 days SPDR Portfolio is expected to generate 5.3 times less return on investment than Global X. But when comparing it to its historical volatility, SPDR Portfolio Aggregate is 2.04 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Adaptive is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,167 in Global X Adaptive on September 12, 2024 and sell it today you would earn a total of 1,210 from holding Global X Adaptive or generate 38.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Aggregate vs. Global X Adaptive
Performance |
| Timeline |
| SPDR Portfolio Aggregate |
| Global X Adaptive |
SPDR Portfolio and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and Global X
The main advantage of trading using opposite SPDR Portfolio and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| 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 |
| Global X vs. SPDR Portfolio Aggregate | Global X vs. WBI Power Factor | Global X vs. Global X MSCI | Global X vs. HUMANA INC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |