Correlation Between SPDR Series and Barclays PLC
Can any of the company-specific risk be diversified away by investing in both SPDR Series and Barclays PLC 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 Series and Barclays PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Series Trust and Barclays PLC, you can compare the effects of market volatilities on SPDR Series and Barclays PLC 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 Series with a short position of Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and Barclays PLC.
Diversification Opportunities for SPDR Series and Barclays PLC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Barclays is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and Barclays PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC and SPDR Series 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 Series Trust are associated (or correlated) with Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC has no effect on the direction of SPDR Series i.e., SPDR Series and Barclays PLC go up and down completely randomly.
Pair Corralation between SPDR Series and Barclays PLC
Assuming the 90 days trading horizon SPDR Series Trust is expected to generate 1.34 times more return on investment than Barclays PLC. However, SPDR Series is 1.34 times more volatile than Barclays PLC. It trades about 0.25 of its potential returns per unit of risk. Barclays PLC is currently generating about 0.22 per unit of risk. If you would invest 262,000 in SPDR Series Trust on September 4, 2024 and sell it today you would earn a total of 29,000 from holding SPDR Series Trust or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPDR Series Trust vs. Barclays PLC
Performance |
| Timeline |
| SPDR Series Trust |
| Barclays PLC |
SPDR Series and Barclays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and Barclays PLC
The main advantage of trading using opposite SPDR Series and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series position performs unexpectedly, Barclays PLC 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.| SPDR Series vs. SPDR Dow Jones | SPDR Series vs. SPDR Gold Trust | SPDR Series vs. SPDR SP 500 | SPDR Series vs. SPDR SP Regional |
| Barclays PLC vs. Monster Beverage Corp | Barclays PLC vs. Grupo Sports World | Barclays PLC vs. KB Home | Barclays PLC vs. Verizon Communications |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |