Correlation Between SPDR Barclays and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and SPDR Portfolio 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 Barclays and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and SPDR Portfolio Corporate, you can compare the effects of market volatilities on SPDR Barclays and SPDR Portfolio 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 Barclays with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and SPDR Portfolio.
Diversification Opportunities for SPDR Barclays and SPDR Portfolio
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and SPDR Portfolio Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Corporate and SPDR Barclays 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 Barclays Intermediate are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Corporate has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and SPDR Portfolio go up and down completely randomly.
Pair Corralation between SPDR Barclays and SPDR Portfolio
Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.65 times more return on investment than SPDR Portfolio. However, SPDR Barclays Intermediate is 1.55 times less risky than SPDR Portfolio. It trades about -0.12 of its potential returns per unit of risk. SPDR Portfolio Corporate is currently generating about -0.2 per unit of risk. If you would invest 3,244 in SPDR Barclays Intermediate on February 1, 2024 and sell it today you would lose (22.00) from holding SPDR Barclays Intermediate or give up 0.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR Barclays Intermediate vs. SPDR Portfolio Corporate
Performance |
Timeline |
SPDR Barclays Interm |
SPDR Portfolio Corporate |
SPDR Barclays and SPDR Portfolio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR Barclays and SPDR Portfolio
The main advantage of trading using opposite SPDR Barclays and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.SPDR Barclays vs. Fidelity Limited Term | SPDR Barclays vs. Fidelity Total Bond | SPDR Barclays vs. Fidelity High Yield | SPDR Barclays vs. HUMANA INC |
SPDR Portfolio vs. Fidelity Limited Term | SPDR Portfolio vs. Fidelity Total Bond | SPDR Portfolio vs. Fidelity High Yield | SPDR Portfolio vs. HUMANA INC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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