Correlation Between SPDR SP and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Barclays Capital 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 SP and Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Barclays Capital, you can compare the effects of market volatilities on SPDR SP and Barclays Capital 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 SP with a short position of Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Barclays Capital.
Diversification Opportunities for SPDR SP and Barclays Capital
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Barclays is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and SPDR SP 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 SP 500 are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of SPDR SP i.e., SPDR SP and Barclays Capital go up and down completely randomly.
Pair Corralation between SPDR SP and Barclays Capital
If you would invest 58,083 in SPDR SP 500 on August 29, 2024 and sell it today you would earn a total of 1,982 from holding SPDR SP 500 or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
SPDR SP 500 vs. Barclays Capital
Performance |
| Timeline |
| SPDR SP 500 |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Barclays Capital
The main advantage of trading using opposite SPDR SP and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| SPDR SP vs. FT Vest Equity | SPDR SP vs. Northern Lights | SPDR SP vs. Dimensional International High | SPDR SP vs. First Trust Exchange Traded |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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