Correlation Between IShares India and SPDR SP
Can any of the company-specific risk be diversified away by investing in both IShares India and SPDR SP 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 India and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares India 50 and SPDR SP Dividend, you can compare the effects of market volatilities on IShares India and SPDR SP 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 India with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares India and SPDR SP.
Diversification Opportunities for IShares India and SPDR SP
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and SPDR is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares India 50 and SPDR SP Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Dividend and IShares India 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 India 50 are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Dividend has no effect on the direction of IShares India i.e., IShares India and SPDR SP go up and down completely randomly.
Pair Corralation between IShares India and SPDR SP
Given the investment horizon of 90 days iShares India 50 is expected to generate 0.88 times more return on investment than SPDR SP. However, iShares India 50 is 1.14 times less risky than SPDR SP. It trades about 0.05 of its potential returns per unit of risk. SPDR SP Dividend is currently generating about 0.02 per unit of risk. If you would invest 4,208 in iShares India 50 on January 25, 2024 and sell it today you would earn a total of 839.00 from holding iShares India 50 or generate 19.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares India 50 vs. SPDR SP Dividend
Performance |
| Timeline |
| iShares India 50 |
| SPDR SP Dividend |
IShares India and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares India and SPDR SP
The main advantage of trading using opposite IShares India and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares India position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| IShares India vs. iShares MSCI India | IShares India vs. Invesco India ETF | IShares India vs. iShares MSCI India | IShares India vs. WisdomTree India Earnings |
| SPDR SP vs. Vanguard Quality Factor | SPDR SP vs. Vanguard Momentum Factor | SPDR SP vs. Vanguard Multifactor | SPDR SP vs. Vanguard Minimum Volatility |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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