Correlation Between SPDR Bloomberg and Vanguard Intermediate

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

By analyzing existing cross correlation between SPDR Bloomberg Barclays and Vanguard Intermediate Term Treasury, you can compare the effects of market volatilities on SPDR Bloomberg and Vanguard Intermediate 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 Bloomberg with a short position of Vanguard Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and Vanguard Intermediate.

Diversification Opportunities for SPDR Bloomberg and Vanguard Intermediate

0.9

Correlation Coefficient

SPDR Bloomberg  Vanguard Intermediate

Almost no diversification

The 3 months correlation between SPDR and Vanguard is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Barclays and Vanguard Intermediate Term Tre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Intermediate and SPDR Bloomberg 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 Bloomberg Barclays are associated (or correlated) with Vanguard Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Intermediate has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and Vanguard Intermediate go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and Vanguard Intermediate

Considering the 90-day investment horizon SPDR Bloomberg is expected to generate 1.27 times less return on investment than Vanguard Intermediate. In addition to that, SPDR Bloomberg is 1.11 times more volatile than Vanguard Intermediate Term Treasury. It trades about 0.07 of its total potential returns per unit of risk. Vanguard Intermediate Term Treasury is currently generating about 0.1 per unit of volatility. If you would invest  5,881  in Vanguard Intermediate Term Treasury on May 5, 2025 and sell it today you would earn a total of  94.00  from holding Vanguard Intermediate Term Treasury or generate 1.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SPDR Bloomberg Barclays  vs.  Vanguard Intermediate Term Tre

SPDR Bloomberg Barclays

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Barclays are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Vanguard Intermediate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Intermediate Term Treasury are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Vanguard Intermediate is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SPDR Bloomberg and Vanguard Intermediate

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

The idea behind SPDR Bloomberg Barclays and Vanguard Intermediate Term Treasury 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.