Correlation Between SPDR Barclays and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio Intermediate, you can compare the effects of market volatilities on SPDR Barclays and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and SPDR Portfolio.
Diversification Opportunities for SPDR Barclays and SPDR Portfolio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long and SPDR Portfolio Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Inter 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Inter has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and SPDR Portfolio go up and down completely randomly.
Pair Corralation between SPDR Barclays and SPDR Portfolio
Given the investment horizon of 90 days SPDR Barclays Long is expected to generate 2.23 times more return on investment than SPDR Portfolio. However, SPDR Barclays is 2.23 times more volatile than SPDR Portfolio Intermediate. It trades about 0.06 of its potential returns per unit of risk. SPDR Portfolio Intermediate is currently generating about 0.1 per unit of risk. If you would invest 2,222 in SPDR Barclays Long on September 1, 2024 and sell it today you would earn a total of 107.00 from holding SPDR Barclays Long or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Long vs. SPDR Portfolio Intermediate
Performance |
| Timeline |
| SPDR Barclays Long |
| SPDR Portfolio Inter |
SPDR Barclays and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and SPDR Portfolio
The main advantage of trading using opposite SPDR Barclays and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio'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 |
| SPDR Portfolio vs. Janus Henderson Short | SPDR Portfolio vs. iShares CMBS ETF | SPDR Portfolio vs. Janus Detroit Street | SPDR Portfolio vs. Alpha Architect Gdsdn |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stocks Directory Find actively traded stocks across global markets |