Correlation Between SPDR Portfolio and IShares Global
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and IShares Global 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 Global 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 Global REIT, you can compare the effects of market volatilities on SPDR Portfolio and IShares Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and IShares Global.
Diversification Opportunities for SPDR Portfolio and IShares Global
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPDR and IShares is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Emerging and iShares Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global REIT 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global REIT has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and IShares Global go up and down completely randomly.
Pair Corralation between SPDR Portfolio and IShares Global
Given the investment horizon of 90 days SPDR Portfolio Emerging is expected to generate 0.88 times more return on investment than IShares Global. However, SPDR Portfolio Emerging is 1.14 times less risky than IShares Global. It trades about 0.05 of its potential returns per unit of risk. iShares Global REIT is currently generating about 0.04 per unit of risk. If you would invest 3,195 in SPDR Portfolio Emerging on September 2, 2024 and sell it today you would earn a total of 745.00 from holding SPDR Portfolio Emerging or generate 23.32% 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 Global REIT
Performance |
| Timeline |
| SPDR Portfolio Emerging |
| iShares Global REIT |
SPDR Portfolio and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and IShares Global
The main advantage of trading using opposite SPDR Portfolio and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| SPDR Portfolio vs. SPDR SP World | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Russell Small |
| IShares Global vs. South Plains Financial | IShares Global vs. Red River Bancshares | IShares Global vs. NI Holdings | IShares Global vs. Western New England |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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