Correlation Between SPDR Portfolio and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays Short, you can compare the effects of market volatilities on SPDR Portfolio and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and SPDR Barclays.
Diversification Opportunities for SPDR Portfolio and SPDR Barclays
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and SPDR is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Intermediate and SPDR Barclays Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Short 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Short has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and SPDR Barclays go up and down completely randomly.
Pair Corralation between SPDR Portfolio and SPDR Barclays
Given the investment horizon of 90 days SPDR Portfolio is expected to generate 2.51 times less return on investment than SPDR Barclays. In addition to that, SPDR Portfolio is 2.87 times more volatile than SPDR Barclays Short. It trades about 0.02 of its total potential returns per unit of risk. SPDR Barclays Short is currently generating about 0.16 per unit of volatility. If you would invest 2,709 in SPDR Barclays Short on October 20, 2024 and sell it today you would earn a total of 283.00 from holding SPDR Barclays Short or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SPDR Portfolio Intermediate vs. SPDR Barclays Short
Performance |
| Timeline |
| SPDR Portfolio Inter |
| SPDR Barclays Short |
SPDR Portfolio and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and SPDR Barclays
The main advantage of trading using opposite SPDR Portfolio and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, SPDR Barclays 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 Barclays will offset losses from the drop in SPDR Barclays' long position.| SPDR Portfolio vs. SPDR Barclays Short | SPDR Portfolio vs. SPDR Barclays Long | SPDR Portfolio vs. SPDR Portfolio Mortgage | SPDR Portfolio vs. SPDR Barclays Intermediate |
| SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. Western Asset Short | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. iShares 1 5 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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