Correlation Between IShares Global and SPDR Series
Can any of the company-specific risk be diversified away by investing in both IShares Global and SPDR Series 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 Global and SPDR Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Clean and SPDR Series Trust, you can compare the effects of market volatilities on IShares Global and SPDR Series 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 Global with a short position of SPDR Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and SPDR Series.
Diversification Opportunities for IShares Global and SPDR Series
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and SPDR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Clean and SPDR Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Series Trust and IShares Global 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 Global Clean are associated (or correlated) with SPDR Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Series Trust has no effect on the direction of IShares Global i.e., IShares Global and SPDR Series go up and down completely randomly.
Pair Corralation between IShares Global and SPDR Series
Assuming the 90 days trading horizon iShares Global Clean is expected to generate 1.49 times more return on investment than SPDR Series. However, IShares Global is 1.49 times more volatile than SPDR Series Trust. It trades about 0.03 of its potential returns per unit of risk. SPDR Series Trust is currently generating about -0.16 per unit of risk. If you would invest 22,867 in iShares Global Clean on February 3, 2024 and sell it today you would earn a total of 123.00 from holding iShares Global Clean or generate 0.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
iShares Global Clean vs. SPDR Series Trust
Performance |
Timeline |
iShares Global Clean |
SPDR Series Trust |
IShares Global and SPDR Series Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Global and SPDR Series
The main advantage of trading using opposite IShares Global and SPDR Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, SPDR Series 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 Series will offset losses from the drop in SPDR Series' long position.IShares Global vs. Vanguard Index Funds | IShares Global vs. Vanguard Index Funds | IShares Global vs. Vanguard STAR Funds | IShares Global vs. SPDR SP 500 |
SPDR Series vs. Vanguard Index Funds | SPDR Series vs. Vanguard Index Funds | SPDR Series vs. Vanguard STAR Funds | SPDR Series vs. SPDR SP 500 |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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