Correlation Between DBX ETF and SPDR SP

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

By analyzing existing cross correlation between DBX ETF Trust and SPDR SP 400, you can compare the effects of market volatilities on DBX ETF 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 DBX ETF with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBX ETF and SPDR SP.

Diversification Opportunities for DBX ETF and SPDR SP

0.99

Correlation Coefficient

DBX ETF  SPDR SP

No risk reduction

The 3 months correlation between DBX and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding DBX ETF Trust and SPDR SP 400 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 400 and DBX ETF 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 DBX ETF Trust 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 400 has no effect on the direction of DBX ETF i.e., DBX ETF and SPDR SP go up and down completely randomly.

Pair Corralation between DBX ETF and SPDR SP

Given the investment horizon of 90 days DBX ETF Trust is expected to generate 0.97 times more return on investment than SPDR SP. However, DBX ETF Trust is 1.03 times less risky than SPDR SP. It trades about 0.11 of its potential returns per unit of risk. SPDR SP 400 is currently generating about 0.09 per unit of risk. If you would invest  2,859  in DBX ETF Trust on May 4, 2025 and sell it today you would earn a total of  199.00  from holding DBX ETF Trust or generate 6.96% return on investment over 90 days.

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

DBX ETF Trust  vs.  SPDR SP 400

DBX ETF Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DBX ETF Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, DBX ETF may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SPDR SP 400

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP 400 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SPDR SP is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with DBX ETF and SPDR SP

The main advantage of trading using opposite DBX ETF and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBX ETF 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 DBX ETF Trust and SPDR SP 400 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.