Correlation Between SPDR Barclays and VanEck Emerging
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and VanEck Emerging 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 Emerging 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 Emerging Markets, you can compare the effects of market volatilities on SPDR Barclays and VanEck Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and VanEck Emerging.
Diversification Opportunities for SPDR Barclays and VanEck Emerging
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and VanEck is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long and VanEck Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Emerging Markets 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Emerging Markets has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and VanEck Emerging go up and down completely randomly.
Pair Corralation between SPDR Barclays and VanEck Emerging
Given the investment horizon of 90 days SPDR Barclays Long is expected to generate 2.0 times more return on investment than VanEck Emerging. However, SPDR Barclays is 2.0 times more volatile than VanEck Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. VanEck Emerging Markets is currently generating about 0.09 per unit of risk. If you would invest 2,296 in SPDR Barclays Long on August 31, 2024 and sell it today you would earn a total of 33.00 from holding SPDR Barclays Long or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Long vs. VanEck Emerging Markets
Performance |
| Timeline |
| SPDR Barclays Long |
| VanEck Emerging Markets |
SPDR Barclays and VanEck Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and VanEck Emerging
The main advantage of trading using opposite SPDR Barclays and VanEck Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, VanEck Emerging 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 Emerging will offset losses from the drop in VanEck Emerging'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 Emerging vs. Invesco Emerging Markets | VanEck Emerging vs. iShares JP Morgan | VanEck Emerging vs. Bondbloxx ETF Trust | VanEck Emerging vs. SPDR Bloomberg Barclays |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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