Correlation Between SPDR Portfolio and DBX ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and DBX ETF 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 DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Emerging and DBX ETF Trust, you can compare the effects of market volatilities on SPDR Portfolio and DBX ETF 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and DBX ETF.
Diversification Opportunities for SPDR Portfolio and DBX ETF
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and DBX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Emerging and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust 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 Emerging are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and DBX ETF go up and down completely randomly.
Pair Corralation between SPDR Portfolio and DBX ETF
Given the investment horizon of 90 days SPDR Portfolio is expected to generate 1.43 times less return on investment than DBX ETF. But when comparing it to its historical volatility, SPDR Portfolio Emerging is 1.08 times less risky than DBX ETF. It trades about 0.12 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,453 in DBX ETF Trust on February 6, 2024 and sell it today you would earn a total of 91.00 from holding DBX ETF Trust or generate 3.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR Portfolio Emerging vs. DBX ETF Trust
Performance |
Timeline |
SPDR Portfolio Emerging |
DBX ETF Trust |
SPDR Portfolio and DBX ETF Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR Portfolio and DBX ETF
The main advantage of trading using opposite SPDR Portfolio and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.SPDR Portfolio vs. Hartford Multifactor Equity | SPDR Portfolio vs. Hartford Multifactor Developed | SPDR Portfolio vs. Morningstar Unconstrained Allocation | SPDR Portfolio vs. Via Renewables |
DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. Hartford Multifactor Developed | DBX ETF vs. Morningstar Unconstrained Allocation | DBX ETF vs. Via Renewables |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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