Correlation Between SPDR MSCI and BlackRock ESG
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and BlackRock ESG 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 MSCI and BlackRock ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI World and BlackRock ESG Multi Asset, you can compare the effects of market volatilities on SPDR MSCI and BlackRock ESG 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 MSCI with a short position of BlackRock ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and BlackRock ESG.
Diversification Opportunities for SPDR MSCI and BlackRock ESG
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and BlackRock is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI World and BlackRock ESG Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ESG Multi and SPDR MSCI 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 MSCI World are associated (or correlated) with BlackRock ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ESG Multi has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and BlackRock ESG go up and down completely randomly.
Pair Corralation between SPDR MSCI and BlackRock ESG
Assuming the 90 days trading horizon SPDR MSCI World is expected to generate 0.87 times more return on investment than BlackRock ESG. However, SPDR MSCI World is 1.15 times less risky than BlackRock ESG. It trades about 0.37 of its potential returns per unit of risk. BlackRock ESG Multi Asset is currently generating about 0.22 per unit of risk. If you would invest 4,423 in SPDR MSCI World on September 2, 2024 and sell it today you would earn a total of 211.00 from holding SPDR MSCI World or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MSCI World vs. BlackRock ESG Multi Asset
Performance |
| Timeline |
| SPDR MSCI World |
| BlackRock ESG Multi |
SPDR MSCI and BlackRock ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and BlackRock ESG
The main advantage of trading using opposite SPDR MSCI and BlackRock ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, BlackRock ESG 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 BlackRock ESG will offset losses from the drop in BlackRock ESG's long position.| SPDR MSCI vs. BlackRock ESG Multi Asset | SPDR MSCI vs. Pershing Square Holdings | SPDR MSCI vs. ASML Holding NV | SPDR MSCI vs. Koninklijke Philips NV |
| BlackRock ESG vs. Vanguard SP 500 | BlackRock ESG vs. SPDR Dow Jones | BlackRock ESG vs. iShares Core MSCI | BlackRock ESG vs. iShares SP 500 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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