Correlation Between SPDR FTSE and PBND
Can any of the company-specific risk be diversified away by investing in both SPDR FTSE and PBND 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 PBND 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 PBND, you can compare the effects of market volatilities on SPDR FTSE and PBND 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 PBND. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR FTSE and PBND.
Diversification Opportunities for SPDR FTSE and PBND
Poor diversification
The 3 months correlation between SPDR and PBND is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FTSE International and PBND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBND 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 PBND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBND has no effect on the direction of SPDR FTSE i.e., SPDR FTSE and PBND go up and down completely randomly.
Pair Corralation between SPDR FTSE and PBND
If you would invest 2,177 in PBND on August 29, 2024 and sell it today you would earn a total of 0.00 from holding PBND or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
SPDR FTSE International vs. PBND
Performance |
| Timeline |
| SPDR FTSE International |
| PBND |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR FTSE and PBND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR FTSE and PBND
The main advantage of trading using opposite SPDR FTSE and PBND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR FTSE position performs unexpectedly, PBND 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 PBND will offset losses from the drop in PBND's long position.| SPDR FTSE vs. Vanguard Emerging Markets | SPDR FTSE vs. VanEck China Bond | SPDR FTSE vs. FT Vest Equity | SPDR FTSE vs. Zillow Group Class |
| PBND vs. Invesco PureBeta 0 5 | PBND vs. Invesco PureBeta MSCI | PBND vs. Aquagold International | PBND vs. Morningstar Unconstrained Allocation |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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