Correlation Between SPDR Barclays and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and VanEck Vectors 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 VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and VanEck Vectors Moodys, you can compare the effects of market volatilities on SPDR Barclays and VanEck Vectors 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 VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and VanEck Vectors.
Diversification Opportunities for SPDR Barclays and VanEck Vectors
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and VanEck is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and VanEck Vectors Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Moodys 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 Short are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Moodys has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and VanEck Vectors go up and down completely randomly.
Pair Corralation between SPDR Barclays and VanEck Vectors
Given the investment horizon of 90 days SPDR Barclays Short is expected to generate 0.24 times more return on investment than VanEck Vectors. However, SPDR Barclays Short is 4.24 times less risky than VanEck Vectors. It trades about -0.13 of its potential returns per unit of risk. VanEck Vectors Moodys is currently generating about -0.05 per unit of risk. If you would invest 2,907 in SPDR Barclays Short on August 23, 2024 and sell it today you would lose (7.00) from holding SPDR Barclays Short or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Short vs. VanEck Vectors Moodys
Performance |
| Timeline |
| SPDR Barclays Short |
| VanEck Vectors Moodys |
SPDR Barclays and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and VanEck Vectors
The main advantage of trading using opposite SPDR Barclays and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, VanEck Vectors 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 VanEck Vectors will offset losses from the drop in VanEck Vectors' long position.| SPDR Barclays vs. SPDR Barclays Long | SPDR Barclays vs. SPDR Portfolio Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. SPDR Barclays Intermediate |
| VanEck Vectors vs. SPDR Barclays Short | VanEck Vectors vs. SPDR Bloomberg Emerging | VanEck Vectors vs. SPDR Barclays Long | VanEck Vectors vs. SPDR Barclays Short |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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