Correlation Between SPDR Portfolio and IShares 1
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and IShares 1 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 IShares 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Intermediate and iShares 1 3 Year, you can compare the effects of market volatilities on SPDR Portfolio and IShares 1 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 IShares 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and IShares 1.
Diversification Opportunities for SPDR Portfolio and IShares 1
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and IShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Intermediate and iShares 1 3 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 1 3 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 Intermediate are associated (or correlated) with IShares 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 1 3 has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and IShares 1 go up and down completely randomly.
Pair Corralation between SPDR Portfolio and IShares 1
Given the investment horizon of 90 days SPDR Portfolio Intermediate is expected to generate 2.68 times more return on investment than IShares 1. However, SPDR Portfolio is 2.68 times more volatile than iShares 1 3 Year. It trades about 0.09 of its potential returns per unit of risk. iShares 1 3 Year is currently generating about 0.19 per unit of risk. If you would invest 2,722 in SPDR Portfolio Intermediate on September 3, 2024 and sell it today you would earn a total of 118.00 from holding SPDR Portfolio Intermediate or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Intermediate vs. iShares 1 3 Year
Performance |
| Timeline |
| SPDR Portfolio Inter |
| iShares 1 3 |
SPDR Portfolio and IShares 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and IShares 1
The main advantage of trading using opposite SPDR Portfolio and IShares 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, IShares 1 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 IShares 1 will offset losses from the drop in IShares 1's long position.| SPDR Portfolio vs. iShares 10 20 Year | SPDR Portfolio vs. iShares 7 10 Year | SPDR Portfolio vs. iShares 1 3 Year | SPDR Portfolio vs. iShares MBS ETF |
| IShares 1 vs. iShares 7 10 Year | IShares 1 vs. iShares iBoxx Investment | IShares 1 vs. iShares TIPS Bond | IShares 1 vs. iShares 3 7 Year |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |