Correlation Between SPDR Dow and VanEck AMX
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and VanEck AMX 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 Dow and VanEck AMX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and VanEck AMX UCITS, you can compare the effects of market volatilities on SPDR Dow and VanEck AMX 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 Dow with a short position of VanEck AMX. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and VanEck AMX.
Diversification Opportunities for SPDR Dow and VanEck AMX
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and VanEck is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and VanEck AMX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck AMX UCITS and SPDR Dow 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 Dow Jones are associated (or correlated) with VanEck AMX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck AMX UCITS has no effect on the direction of SPDR Dow i.e., SPDR Dow and VanEck AMX go up and down completely randomly.
Pair Corralation between SPDR Dow and VanEck AMX
Assuming the 90 days trading horizon SPDR Dow Jones is expected to generate 1.16 times more return on investment than VanEck AMX. However, SPDR Dow is 1.16 times more volatile than VanEck AMX UCITS. It trades about 0.17 of its potential returns per unit of risk. VanEck AMX UCITS is currently generating about -0.13 per unit of risk. If you would invest 37,589 in SPDR Dow Jones on September 24, 2024 and sell it today you would earn a total of 3,626 from holding SPDR Dow Jones or generate 9.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR Dow Jones vs. VanEck AMX UCITS
Performance |
Timeline |
SPDR Dow Jones |
VanEck AMX UCITS |
SPDR Dow and VanEck AMX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR Dow and VanEck AMX
The main advantage of trading using opposite SPDR Dow and VanEck AMX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, VanEck AMX 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 VanEck AMX will offset losses from the drop in VanEck AMX's long position.SPDR Dow vs. iShares Core MSCI | SPDR Dow vs. Vanguard FTSE All World | SPDR Dow vs. iShares China CNY | SPDR Dow vs. iShares Core MSCI |
VanEck AMX vs. SPDR Dow Jones | VanEck AMX vs. iShares Core MSCI | VanEck AMX vs. Vanguard FTSE All World | VanEck AMX vs. iShares China CNY |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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