Correlation Between IShares Core and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both IShares Core and SPDR Portfolio 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 IShares Core and SPDR Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and SPDR Portfolio SP, you can compare the effects of market volatilities on IShares Core and SPDR Portfolio 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 IShares Core with a short position of SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SPDR Portfolio.
Diversification Opportunities for IShares Core and SPDR Portfolio
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and SPDR is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP and IShares Core 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 iShares Core SP are associated (or correlated) with SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of IShares Core i.e., IShares Core and SPDR Portfolio go up and down completely randomly.
Pair Corralation between IShares Core and SPDR Portfolio
Considering the 90-day investment horizon iShares Core SP is expected to generate 0.81 times more return on investment than SPDR Portfolio. However, iShares Core SP is 1.23 times less risky than SPDR Portfolio. It trades about 0.06 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.03 per unit of risk. If you would invest 5,452 in iShares Core SP on September 25, 2024 and sell it today you would earn a total of 800.00 from holding iShares Core SP or generate 14.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iShares Core SP vs. SPDR Portfolio SP
Performance |
Timeline |
iShares Core SP |
SPDR Portfolio SP |
IShares Core and SPDR Portfolio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares Core and SPDR Portfolio
The main advantage of trading using opposite IShares Core and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SPDR Portfolio 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 Portfolio will offset losses from the drop in SPDR Portfolio's long position.IShares Core vs. FT Vest Equity | IShares Core vs. Northern Lights | IShares Core vs. Dimensional International High | IShares Core vs. JPMorgan Fundamental Data |
SPDR Portfolio vs. iShares Core SP | SPDR Portfolio vs. iShares Core SP | SPDR Portfolio vs. iShares SP Small Cap | SPDR Portfolio vs. iShares SP 500 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |