Correlation Between SPDR Portfolio and IShares International
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio 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 Portfolio 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 Portfolio Emerging and iShares International Developed, you can compare the effects of market volatilities on SPDR Portfolio 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 Portfolio with a short position of IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and IShares International.
Diversification Opportunities for SPDR Portfolio and IShares International
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPDR and IShares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Emerging and iShares International Develope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 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 Portfolio i.e., SPDR Portfolio and IShares International go up and down completely randomly.
Pair Corralation between SPDR Portfolio and IShares International
Given the investment horizon of 90 days SPDR Portfolio Emerging is expected to generate 0.89 times more return on investment than IShares International. However, SPDR Portfolio Emerging is 1.12 times less risky than IShares International. It trades about 0.05 of its potential returns per unit of risk. iShares International Developed is currently generating about 0.01 per unit of risk. If you would invest 3,217 in SPDR Portfolio Emerging on August 27, 2024 and sell it today you would earn a total of 712.00 from holding SPDR Portfolio Emerging or generate 22.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Emerging vs. iShares International Develope
Performance |
| Timeline |
| SPDR Portfolio Emerging |
| iShares International |
SPDR Portfolio and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and IShares International
The main advantage of trading using opposite SPDR Portfolio and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio 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 Portfolio vs. Invesco PureBeta MSCI | SPDR Portfolio vs. Aquagold International | SPDR Portfolio vs. Morningstar Unconstrained Allocation | SPDR Portfolio vs. High Yield Municipal Fund |
| IShares International vs. iShares International Treasury | IShares International vs. iShares 1 3 Year | IShares International vs. iShares MSCI 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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