Correlation Between SPDR Barclays and VanEck Investment
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and VanEck Investment 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 Barclays and VanEck Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Long and VanEck Investment Grade, you can compare the effects of market volatilities on SPDR Barclays and VanEck Investment 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 Barclays with a short position of VanEck Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and VanEck Investment.
Diversification Opportunities for SPDR Barclays and VanEck Investment
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and VanEck is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long and VanEck Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Investment Grade and SPDR Barclays 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 Barclays Long are associated (or correlated) with VanEck Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Investment Grade has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and VanEck Investment go up and down completely randomly.
Pair Corralation between SPDR Barclays and VanEck Investment
Given the investment horizon of 90 days SPDR Barclays is expected to generate 1.58 times less return on investment than VanEck Investment. In addition to that, SPDR Barclays is 5.19 times more volatile than VanEck Investment Grade. It trades about 0.02 of its total potential returns per unit of risk. VanEck Investment Grade is currently generating about 0.19 per unit of volatility. If you would invest 2,214 in VanEck Investment Grade on August 30, 2024 and sell it today you would earn a total of 338.00 from holding VanEck Investment Grade or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Long vs. VanEck Investment Grade
Performance |
| Timeline |
| SPDR Barclays Long |
| VanEck Investment Grade |
SPDR Barclays and VanEck Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and VanEck Investment
The main advantage of trading using opposite SPDR Barclays and VanEck Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, VanEck Investment 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 VanEck Investment will offset losses from the drop in VanEck Investment's long position.| SPDR Barclays vs. iShares 10 Year | SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. FlexShares Credit Scored Long |
| VanEck Investment vs. SPDR Bloomberg Investment | VanEck Investment vs. iShares Floating Rate | VanEck Investment vs. SPDR Barclays Long | VanEck Investment vs. Invesco Variable Rate |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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