Correlation Between SPDR Series and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both SPDR Series and IShares Canadian 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 IShares Canadian 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 iShares Canadian Short, you can compare the effects of market volatilities on SPDR Series and IShares Canadian 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 IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and IShares Canadian.
Diversification Opportunities for SPDR Series and IShares Canadian
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and IShares is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and iShares Canadian Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian Short 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 IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian Short has no effect on the direction of SPDR Series i.e., SPDR Series and IShares Canadian go up and down completely randomly.
Pair Corralation between SPDR Series and IShares Canadian
Assuming the 90 days trading horizon SPDR Series Trust is expected to generate 1.1 times more return on investment than IShares Canadian. However, SPDR Series is 1.1 times more volatile than iShares Canadian Short. It trades about 0.09 of its potential returns per unit of risk. iShares Canadian Short is currently generating about 0.09 per unit of risk. If you would invest 255,844 in SPDR Series Trust on September 2, 2024 and sell it today you would earn a total of 45,256 from holding SPDR Series Trust or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR Series Trust vs. iShares Canadian Short
Performance |
| Timeline |
| SPDR Series Trust |
| iShares Canadian Short |
SPDR Series and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and IShares Canadian
The main advantage of trading using opposite SPDR Series and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian'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 |
| IShares Canadian vs. iShares Trust | IShares Canadian vs. iShares Trust | IShares Canadian vs. iShares Trust | IShares Canadian vs. iShares Trust |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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