Correlation Between SPDR SP and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and SPDR SP 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 SPDR SP International, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and SPDR SP.
Diversification Opportunities for SPDR SP and SPDR SP
Very weak diversification
The 3 months correlation between SPDR and SPDR is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Global and SPDR SP International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP International 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 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 International has no effect on the direction of SPDR SP i.e., SPDR SP and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR SP and SPDR SP
Given the investment horizon of 90 days SPDR SP Global is expected to generate 0.77 times more return on investment than SPDR SP. However, SPDR SP Global is 1.3 times less risky than SPDR SP. It trades about 0.09 of its potential returns per unit of risk. SPDR SP International is currently generating about 0.02 per unit of risk. If you would invest 6,520 in SPDR SP Global on September 1, 2024 and sell it today you would earn a total of 59.00 from holding SPDR SP Global or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Global vs. SPDR SP International
Performance |
| Timeline |
| SPDR SP Global |
| SPDR SP International |
SPDR SP and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and SPDR SP
The main advantage of trading using opposite SPDR SP and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. Horizon Kinetics Inflation | SPDR SP vs. Simplify Exchange Traded | SPDR SP vs. iMGP DBi Managed | SPDR SP vs. Quadratic Interest Rate |
| SPDR SP vs. SPDR SP Emerging | SPDR SP vs. iShares International Select | SPDR SP vs. First Trust Dow | SPDR SP vs. Invesco International Dividend |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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