Correlation Between Vanguard Russell and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Vanguard Russell and SPDR SP 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 Vanguard Russell and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Russell 1000 and SPDR SP 1500, you can compare the effects of market volatilities on Vanguard Russell and SPDR SP 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 Vanguard Russell with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Russell and SPDR SP.
Diversification Opportunities for Vanguard Russell and SPDR SP
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Russell 1000 and SPDR SP 1500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 1500 and Vanguard Russell 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 Vanguard Russell 1000 are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 1500 has no effect on the direction of Vanguard Russell i.e., Vanguard Russell and SPDR SP go up and down completely randomly.
Pair Corralation between Vanguard Russell and SPDR SP
Assuming the 90 days horizon Vanguard Russell 1000 is expected to generate 1.11 times more return on investment than SPDR SP. However, Vanguard Russell is 1.11 times more volatile than SPDR SP 1500. It trades about 0.1 of its potential returns per unit of risk. SPDR SP 1500 is currently generating about 0.11 per unit of risk. If you would invest 67,341 in Vanguard Russell 1000 on August 28, 2024 and sell it today you would earn a total of 10,749 from holding Vanguard Russell 1000 or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Russell 1000 vs. SPDR SP 1500
Performance |
| Timeline |
| Vanguard Russell 1000 |
| SPDR SP 1500 |
Vanguard Russell and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Russell and SPDR SP
The main advantage of trading using opposite Vanguard Russell and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Russell position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| Vanguard Russell vs. Vanguard FTSE Canadian | Vanguard Russell vs. Vanguard Mortgage Backed Securities | Vanguard Russell vs. Vanguard Funds Public | Vanguard Russell vs. Vanguard Funds Public |
| SPDR SP vs. Freedom Day Dividend | SPDR SP vs. Davis Select International | SPDR SP vs. iShares MSCI China | SPDR SP vs. SmartETFs Dividend Builder |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |