Correlation Between Xtrackers Emerging and SPDR SP

Can any of the company-specific risk be diversified away by investing in both Xtrackers Emerging and SPDR SP 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 Xtrackers Emerging and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtrackers Emerging Markets and SPDR SP 500, you can compare the effects of market volatilities on Xtrackers Emerging and SPDR SP 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 Xtrackers Emerging with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Emerging and SPDR SP.

Diversification Opportunities for Xtrackers Emerging and SPDR SP

0.0

Correlation Coefficient

Xtrackers Emerging  SPDR SP

Pay attention - limited upside

The 3 months correlation between Xtrackers and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Emerging Markets and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 and Xtrackers Emerging 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 Xtrackers Emerging Markets are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of Xtrackers Emerging i.e., Xtrackers Emerging and SPDR SP go up and down completely randomly.

Pair Corralation between Xtrackers Emerging and SPDR SP

If you would invest  56,184  in SPDR SP 500 on May 4, 2025 and sell it today you would earn a total of  5,988  from holding SPDR SP 500 or generate 10.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Xtrackers Emerging Markets  vs.  SPDR SP 500

Xtrackers Emerging

Risk-Adjusted Performance

Good

Over the last 90 days Xtrackers Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Xtrackers Emerging is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

SPDR SP 500

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP 500 are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, SPDR SP may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Xtrackers Emerging and SPDR SP

The main advantage of trading using opposite Xtrackers Emerging and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Emerging position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.

The idea behind Xtrackers Emerging Markets and SPDR SP 500 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.