Correlation Between SPDR FactSet and VanEck Israel
Can any of the company-specific risk be diversified away by investing in both SPDR FactSet and VanEck Israel 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 FactSet and VanEck Israel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR FactSet Innovative and VanEck Israel ETF, you can compare the effects of market volatilities on SPDR FactSet and VanEck Israel 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 FactSet with a short position of VanEck Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR FactSet and VanEck Israel.
Diversification Opportunities for SPDR FactSet and VanEck Israel
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and VanEck is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FactSet Innovative and VanEck Israel ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Israel ETF and SPDR FactSet 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 FactSet Innovative are associated (or correlated) with VanEck Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Israel ETF has no effect on the direction of SPDR FactSet i.e., SPDR FactSet and VanEck Israel go up and down completely randomly.
Pair Corralation between SPDR FactSet and VanEck Israel
Given the investment horizon of 90 days SPDR FactSet Innovative is expected to generate 1.4 times more return on investment than VanEck Israel. However, SPDR FactSet is 1.4 times more volatile than VanEck Israel ETF. It trades about 0.08 of its potential returns per unit of risk. VanEck Israel ETF is currently generating about 0.03 per unit of risk. If you would invest 10,253 in SPDR FactSet Innovative on August 30, 2024 and sell it today you would earn a total of 7,778 from holding SPDR FactSet Innovative or generate 75.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR FactSet Innovative vs. VanEck Israel ETF
Performance |
| Timeline |
| SPDR FactSet Innovative |
| VanEck Israel ETF |
SPDR FactSet and VanEck Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR FactSet and VanEck Israel
The main advantage of trading using opposite SPDR FactSet and VanEck Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR FactSet position performs unexpectedly, VanEck Israel 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 VanEck Israel will offset losses from the drop in VanEck Israel's long position.| SPDR FactSet vs. SPDR SP Software | SPDR FactSet vs. SPDR Morgan Stanley | SPDR FactSet vs. SPDR SP Health |
| VanEck Israel vs. iShares MSCI Ireland | VanEck Israel vs. iShares MSCI Israel | VanEck Israel vs. iShares MSCI Philippines | VanEck Israel vs. iShares MSCI Poland |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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