Correlation Between SPDR SP and IQ 50
Can any of the company-specific risk be diversified away by investing in both SPDR SP and IQ 50 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 SP and IQ 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP World and IQ 50 Percent, you can compare the effects of market volatilities on SPDR SP and IQ 50 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 SP with a short position of IQ 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and IQ 50.
Diversification Opportunities for SPDR SP and IQ 50
Almost no diversification
The 3 months correlation between SPDR and HFXI is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP World and IQ 50 Percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ 50 Percent and SPDR SP 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 SP World are associated (or correlated) with IQ 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ 50 Percent has no effect on the direction of SPDR SP i.e., SPDR SP and IQ 50 go up and down completely randomly.
Pair Corralation between SPDR SP and IQ 50
Given the investment horizon of 90 days SPDR SP World is expected to generate 1.08 times more return on investment than IQ 50. However, SPDR SP is 1.08 times more volatile than IQ 50 Percent. It trades about 0.01 of its potential returns per unit of risk. IQ 50 Percent is currently generating about 0.0 per unit of risk. If you would invest 3,576 in SPDR SP World on September 1, 2024 and sell it today you would earn a total of 6.00 from holding SPDR SP World or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR SP World vs. IQ 50 Percent
Performance |
| Timeline |
| SPDR SP World |
| IQ 50 Percent |
SPDR SP and IQ 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and IQ 50
The main advantage of trading using opposite SPDR SP and IQ 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, IQ 50 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 IQ 50 will offset losses from the drop in IQ 50's long position.| SPDR SP vs. SPDR Portfolio Emerging | SPDR SP vs. SPDR Portfolio SP | SPDR SP vs. SPDR Portfolio SP | SPDR SP vs. SPDR Russell Small |
| IQ 50 vs. iShares ESG Aggregate | IQ 50 vs. SPDR MSCI Emerging | IQ 50 vs. Aquagold International | IQ 50 vs. Thrivent High Yield |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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