Correlation Between IShares SPTSX and Global Dividend
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and Global Dividend 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 IShares SPTSX and Global Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX Global and Global Dividend Growth, you can compare the effects of market volatilities on IShares SPTSX and Global Dividend 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 IShares SPTSX with a short position of Global Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Global Dividend.
Diversification Opportunities for IShares SPTSX and Global Dividend
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and Global is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Global and Global Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Dividend Growth and IShares SPTSX 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 iShares SPTSX Global are associated (or correlated) with Global Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Dividend Growth has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Global Dividend go up and down completely randomly.
Pair Corralation between IShares SPTSX and Global Dividend
Assuming the 90 days trading horizon iShares SPTSX Global is expected to generate 1.43 times more return on investment than Global Dividend. However, IShares SPTSX is 1.43 times more volatile than Global Dividend Growth. It trades about 0.28 of its potential returns per unit of risk. Global Dividend Growth is currently generating about 0.14 per unit of risk. If you would invest 2,145 in iShares SPTSX Global on September 13, 2024 and sell it today you would earn a total of 213.00 from holding iShares SPTSX Global or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Global vs. Global Dividend Growth
Performance |
| Timeline |
| iShares SPTSX Global |
| Global Dividend Growth |
IShares SPTSX and Global Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Global Dividend
The main advantage of trading using opposite IShares SPTSX and Global Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, Global Dividend 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 Global Dividend will offset losses from the drop in Global Dividend's long position.| IShares SPTSX vs. BMO Junior Gold | IShares SPTSX vs. BMO SPTSX Equal | IShares SPTSX vs. BMO Equal Weight | IShares SPTSX vs. BMO Tactical Dividend |
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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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