Correlation Between SPDR Portfolio and TCW ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and TCW ETF 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 TCW ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio SP and TCW ETF Trust, you can compare the effects of market volatilities on SPDR Portfolio and TCW ETF 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 TCW ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and TCW ETF.
Diversification Opportunities for SPDR Portfolio and TCW ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and TCW is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and TCW ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCW ETF Trust 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 SP are associated (or correlated) with TCW ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCW ETF Trust has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and TCW ETF go up and down completely randomly.
Pair Corralation between SPDR Portfolio and TCW ETF
Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 0.73 times more return on investment than TCW ETF. However, SPDR Portfolio SP is 1.37 times less risky than TCW ETF. It trades about 0.14 of its potential returns per unit of risk. TCW ETF Trust is currently generating about 0.05 per unit of risk. If you would invest 6,166 in SPDR Portfolio SP on September 1, 2024 and sell it today you would earn a total of 923.00 from holding SPDR Portfolio SP or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR Portfolio SP vs. TCW ETF Trust
Performance |
| Timeline |
| SPDR Portfolio SP |
| TCW ETF Trust |
SPDR Portfolio and TCW ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and TCW ETF
The main advantage of trading using opposite SPDR Portfolio and TCW ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, TCW ETF 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 TCW ETF will offset losses from the drop in TCW ETF's long position.| SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. Invesco NASDAQ 100 | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP |
| TCW ETF vs. ProShares Supply Chain | TCW ETF vs. JPMorgan Climate Change | TCW ETF vs. Rbb Fund | TCW ETF vs. Simplify Propel Opportunities |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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