Correlation Between SPDR Portfolio and IShares Global
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and IShares Global 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 Portfolio and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio MSCI and iShares Global 100, you can compare the effects of market volatilities on SPDR Portfolio and IShares Global 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 Portfolio with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and IShares Global.
Diversification Opportunities for SPDR Portfolio and IShares Global
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio MSCI and iShares Global 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global 100 and SPDR Portfolio 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 Portfolio MSCI are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global 100 has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and IShares Global go up and down completely randomly.
Pair Corralation between SPDR Portfolio and IShares Global
Given the investment horizon of 90 days SPDR Portfolio MSCI is expected to under-perform the IShares Global. In addition to that, SPDR Portfolio is 1.01 times more volatile than iShares Global 100. It trades about -0.13 of its total potential returns per unit of risk. iShares Global 100 is currently generating about -0.02 per unit of volatility. If you would invest 8,784 in iShares Global 100 on January 16, 2024 and sell it today you would lose (34.00) from holding iShares Global 100 or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPDR Portfolio MSCI vs. iShares Global 100
Performance |
| Timeline |
| SPDR Portfolio MSCI |
| iShares Global 100 |
SPDR Portfolio and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and IShares Global
The main advantage of trading using opposite SPDR Portfolio and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| SPDR Portfolio vs. VanEck Morningstar International | SPDR Portfolio vs. VanEck ETF Trust | SPDR Portfolio vs. AGFiQ Global Infrastructure | SPDR Portfolio vs. VanEck ETF Trust |
| IShares Global vs. VanEck Morningstar International | IShares Global vs. VanEck ETF Trust | IShares Global vs. AGFiQ Global Infrastructure | IShares Global vs. VanEck ETF 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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