Correlation Between SPDR Portfolio and Macquarie Focused
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and Macquarie Focused 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 Macquarie Focused into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Emerging and Macquarie Focused Emerging, you can compare the effects of market volatilities on SPDR Portfolio and Macquarie Focused 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 Macquarie Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Macquarie Focused.
Diversification Opportunities for SPDR Portfolio and Macquarie Focused
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Macquarie is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Emerging and Macquarie Focused Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Focused 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 Emerging are associated (or correlated) with Macquarie Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Focused has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Macquarie Focused go up and down completely randomly.
Pair Corralation between SPDR Portfolio and Macquarie Focused
Given the investment horizon of 90 days SPDR Portfolio Emerging is expected to generate 0.75 times more return on investment than Macquarie Focused. However, SPDR Portfolio Emerging is 1.34 times less risky than Macquarie Focused. It trades about -0.13 of its potential returns per unit of risk. Macquarie Focused Emerging is currently generating about -0.18 per unit of risk. If you would invest 4,029 in SPDR Portfolio Emerging on August 31, 2024 and sell it today you would lose (107.00) from holding SPDR Portfolio Emerging or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Emerging vs. Macquarie Focused Emerging
Performance |
| Timeline |
| SPDR Portfolio Emerging |
| Macquarie Focused |
SPDR Portfolio and Macquarie Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and Macquarie Focused
The main advantage of trading using opposite SPDR Portfolio and Macquarie Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, Macquarie Focused 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 Macquarie Focused will offset losses from the drop in Macquarie Focused's long position.| SPDR Portfolio vs. Xtrackers MSCI Emerging | SPDR Portfolio vs. FlexShares Morningstar Emerging | SPDR Portfolio vs. First Trust Emerging |
| Macquarie Focused vs. Xtrackers MSCI Emerging | Macquarie Focused vs. FlexShares Morningstar Emerging | Macquarie Focused vs. First Trust Emerging |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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