Correlation Between SPDR FTSE and SPDR Bloomberg
Can any of the company-specific risk be diversified away by investing in both SPDR FTSE and SPDR Bloomberg 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 FTSE and SPDR Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR FTSE International and SPDR Bloomberg International, you can compare the effects of market volatilities on SPDR FTSE and SPDR Bloomberg 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 FTSE with a short position of SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR FTSE and SPDR Bloomberg.
Diversification Opportunities for SPDR FTSE and SPDR Bloomberg
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FTSE International and SPDR Bloomberg International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Inter and SPDR FTSE 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 FTSE International are associated (or correlated) with SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Inter has no effect on the direction of SPDR FTSE i.e., SPDR FTSE and SPDR Bloomberg go up and down completely randomly.
Pair Corralation between SPDR FTSE and SPDR Bloomberg
Considering the 90-day investment horizon SPDR FTSE is expected to generate 1.17 times less return on investment than SPDR Bloomberg. In addition to that, SPDR FTSE is 1.27 times more volatile than SPDR Bloomberg International. It trades about 0.1 of its total potential returns per unit of risk. SPDR Bloomberg International is currently generating about 0.14 per unit of volatility. If you would invest 2,810 in SPDR Bloomberg International on November 3, 2024 and sell it today you would earn a total of 47.00 from holding SPDR Bloomberg International or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR FTSE International vs. SPDR Bloomberg International
Performance |
| Timeline |
| SPDR FTSE International |
| SPDR Bloomberg Inter |
SPDR FTSE and SPDR Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR FTSE and SPDR Bloomberg
The main advantage of trading using opposite SPDR FTSE and SPDR Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR FTSE position performs unexpectedly, SPDR Bloomberg 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 Bloomberg will offset losses from the drop in SPDR Bloomberg's long position.| SPDR FTSE vs. FT Vest Equity | SPDR FTSE vs. Zillow Group Class | SPDR FTSE vs. Northern Lights | SPDR FTSE vs. VanEck Vectors Moodys |
| SPDR Bloomberg vs. SPDR Bloomberg Short | SPDR Bloomberg vs. Invesco International Corporate | SPDR Bloomberg vs. SPDR Bloomberg Emerging | SPDR Bloomberg vs. SPDR Nuveen Bloomberg |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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