Correlation Between SPDR SP and IShares Silver
Can any of the company-specific risk be diversified away by investing in both SPDR SP and IShares Silver 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 SP and IShares Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and iShares Silver Trust, you can compare the effects of market volatilities on SPDR SP and IShares Silver 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 SP with a short position of IShares Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and IShares Silver.
Diversification Opportunities for SPDR SP and IShares Silver
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and IShares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and iShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Silver Trust and SPDR SP 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 SP 500 are associated (or correlated) with IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Silver Trust has no effect on the direction of SPDR SP i.e., SPDR SP and IShares Silver go up and down completely randomly.
Pair Corralation between SPDR SP and IShares Silver
Considering the 90-day investment horizon SPDR SP 500 is expected to under-perform the IShares Silver. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SP 500 is 2.83 times less risky than IShares Silver. The etf trades about -0.28 of its potential returns per unit of risk. The iShares Silver Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,329 in iShares Silver Trust on January 20, 2024 and sell it today you would earn a total of 257.00 from holding iShares Silver Trust or generate 11.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR SP 500 vs. iShares Silver Trust
Performance |
Timeline |
SPDR SP 500 |
iShares Silver Trust |
SPDR SP and IShares Silver Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR SP and IShares Silver
The main advantage of trading using opposite SPDR SP and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, IShares Silver 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 Silver will offset losses from the drop in IShares Silver's long position.SPDR SP vs. Dimensional Targeted Value | SPDR SP vs. Dimensional World ex | SPDR SP vs. Dimensional Small Cap |
IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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