Correlation Between SPDR SP and IShares International
Can any of the company-specific risk be diversified away by investing in both SPDR SP and IShares International 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 IShares International 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 iShares International Dividend, you can compare the effects of market volatilities on SPDR SP and IShares International 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 IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and IShares International.
Diversification Opportunities for SPDR SP and IShares International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP World and iShares International Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of SPDR SP i.e., SPDR SP and IShares International go up and down completely randomly.
Pair Corralation between SPDR SP and IShares International
Given the investment horizon of 90 days SPDR SP World is expected to under-perform the IShares International. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SP World is 1.03 times less risky than IShares International. The etf trades about -0.12 of its potential returns per unit of risk. The iShares International Dividend is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 7,206 in iShares International Dividend on August 30, 2024 and sell it today you would lose (154.00) from holding iShares International Dividend or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR SP World vs. iShares International Dividend
Performance |
| Timeline |
| SPDR SP World |
| iShares International |
SPDR SP and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and IShares International
The main advantage of trading using opposite SPDR SP and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, IShares International 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 IShares International will offset losses from the drop in IShares International'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 |
| IShares International vs. ABIVAX Socit Anonyme | IShares International vs. HUMANA INC | IShares International vs. SCOR PK | IShares International vs. Aquagold International |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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