Correlation Between SPDR DoubleLine and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and SPDR Barclays 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 DoubleLine and SPDR Barclays into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Short and SPDR Barclays Short, you can compare the effects of market volatilities on SPDR DoubleLine and SPDR Barclays 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 DoubleLine with a short position of SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and SPDR Barclays.
Diversification Opportunities for SPDR DoubleLine and SPDR Barclays
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and SPDR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and SPDR Barclays Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays Short and SPDR DoubleLine 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 DoubleLine Short are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays Short has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and SPDR Barclays go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and SPDR Barclays
Given the investment horizon of 90 days SPDR DoubleLine Short is expected to generate 0.78 times more return on investment than SPDR Barclays. However, SPDR DoubleLine Short is 1.28 times less risky than SPDR Barclays. It trades about 0.2 of its potential returns per unit of risk. SPDR Barclays Short is currently generating about 0.12 per unit of risk. If you would invest 4,438 in SPDR DoubleLine Short on January 21, 2024 and sell it today you would earn a total of 229.00 from holding SPDR DoubleLine Short or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Short vs. SPDR Barclays Short
Performance |
| Timeline |
| SPDR DoubleLine Short |
| SPDR Barclays Short |
SPDR DoubleLine and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and SPDR Barclays
The main advantage of trading using opposite SPDR DoubleLine and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, SPDR Barclays 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 Barclays will offset losses from the drop in SPDR Barclays' long position.| SPDR DoubleLine vs. Vanguard Intermediate Term Bond | SPDR DoubleLine vs. Vanguard Long Term Bond | SPDR DoubleLine vs. Vanguard Total Bond | SPDR DoubleLine vs. Vanguard Intermediate Term Corporate |
| SPDR Barclays vs. Vanguard Intermediate Term Bond | SPDR Barclays vs. Vanguard Long Term Bond | SPDR Barclays vs. Vanguard Total Bond | SPDR Barclays vs. Vanguard Intermediate Term Corporate |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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