Correlation Between SPDR Portfolio and DBX ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and DBX 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 DBX 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 DBX ETF Trust, you can compare the effects of market volatilities on SPDR Portfolio and DBX 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and DBX ETF.
Diversification Opportunities for SPDR Portfolio and DBX ETF
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and DBX is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and DBX ETF go up and down completely randomly.
Pair Corralation between SPDR Portfolio and DBX ETF
Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 1.08 times more return on investment than DBX ETF. However, SPDR Portfolio is 1.08 times more volatile than DBX ETF Trust. It trades about 0.38 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.33 per unit of risk. If you would invest 6,702 in SPDR Portfolio SP on September 4, 2024 and sell it today you would earn a total of 399.00 from holding SPDR Portfolio SP or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio SP vs. DBX ETF Trust
Performance |
| Timeline |
| SPDR Portfolio SP |
| DBX ETF Trust |
SPDR Portfolio and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and DBX ETF
The main advantage of trading using opposite SPDR Portfolio and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, DBX 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 DBX ETF will offset losses from the drop in DBX 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 |
| DBX ETF vs. Vanguard Total Stock | DBX ETF vs. SPDR SP 500 | DBX ETF vs. iShares Core SP | DBX ETF vs. Vanguard Dividend Appreciation |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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