Correlation Between SPDR SP and FlexShares Real
Can any of the company-specific risk be diversified away by investing in both SPDR SP and FlexShares Real 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 FlexShares Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Global and FlexShares Real Assets, you can compare the effects of market volatilities on SPDR SP and FlexShares Real 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 FlexShares Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and FlexShares Real.
Diversification Opportunities for SPDR SP and FlexShares Real
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and FlexShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Global and FlexShares Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Real Assets 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 Global are associated (or correlated) with FlexShares Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Real Assets has no effect on the direction of SPDR SP i.e., SPDR SP and FlexShares Real go up and down completely randomly.
Pair Corralation between SPDR SP and FlexShares Real
Given the investment horizon of 90 days SPDR SP Global is expected to generate 0.96 times more return on investment than FlexShares Real. However, SPDR SP Global is 1.04 times less risky than FlexShares Real. It trades about 0.06 of its potential returns per unit of risk. FlexShares Real Assets is currently generating about 0.04 per unit of risk. If you would invest 5,667 in SPDR SP Global on November 9, 2024 and sell it today you would earn a total of 577.00 from holding SPDR SP Global or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.25% |
| Values | Daily Returns |
SPDR SP Global vs. FlexShares Real Assets
Performance |
| Timeline |
| SPDR SP Global |
| FlexShares Real Assets |
SPDR SP and FlexShares Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and FlexShares Real
The main advantage of trading using opposite SPDR SP and FlexShares Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, FlexShares Real 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 FlexShares Real will offset losses from the drop in FlexShares Real's long position.| SPDR SP vs. SPDR SP Emerging | SPDR SP vs. First Trust Dow | SPDR SP vs. iShares AsiaPacific Dividend | SPDR SP vs. iShares Emerging Markets |
| FlexShares Real vs. WisdomTree Interest Rate | FlexShares Real vs. First Trust Developed | FlexShares Real vs. VictoryShares International Volatility |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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