Correlation Between SPDR Barclays and Gabelli Global

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

By analyzing existing cross correlation between SPDR Barclays Long and Gabelli Global Financial, you can compare the effects of market volatilities on SPDR Barclays and Gabelli Global 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 Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Gabelli Global.

Diversification Opportunities for SPDR Barclays and Gabelli Global

-0.18

Correlation Coefficient

SPDR Barclays  Gabelli Global

Good diversification

The 3 months correlation between SPDR and Gabelli is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Long and Gabelli Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Financial 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 Long are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Financial has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Gabelli Global go up and down completely randomly.

Pair Corralation between SPDR Barclays and Gabelli Global

Given the investment horizon of 90 days SPDR Barclays Long is expected to under-perform the Gabelli Global. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Barclays Long is 1.35 times less risky than Gabelli Global. The etf trades about -0.24 of its potential returns per unit of risk. The Gabelli Global Financial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,642  in Gabelli Global Financial on February 28, 2025 and sell it today you would earn a total of  70.00  from holding Gabelli Global Financial or generate 4.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

SPDR Barclays Long  vs.  Gabelli Global Financial

SPDR Barclays Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Barclays Long has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SPDR Barclays is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Gabelli Global Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Financial are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gabelli Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Barclays and Gabelli Global

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

The idea behind SPDR Barclays Long and Gabelli Global Financial 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.