Correlation Between ISharesGlobal 100 and SPDR SP
Can any of the company-specific risk be diversified away by investing in both ISharesGlobal 100 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 ISharesGlobal 100 and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iSharesGlobal 100 and SPDR SP World, you can compare the effects of market volatilities on ISharesGlobal 100 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 ISharesGlobal 100 with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISharesGlobal 100 and SPDR SP.
Diversification Opportunities for ISharesGlobal 100 and SPDR SP
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ISharesGlobal and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iSharesGlobal 100 and SPDR SP World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP World and ISharesGlobal 100 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 iSharesGlobal 100 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 World has no effect on the direction of ISharesGlobal 100 i.e., ISharesGlobal 100 and SPDR SP go up and down completely randomly.
Pair Corralation between ISharesGlobal 100 and SPDR SP
Assuming the 90 days trading horizon iSharesGlobal 100 is expected to generate 1.26 times more return on investment than SPDR SP. However, ISharesGlobal 100 is 1.26 times more volatile than SPDR SP World. It trades about 0.53 of its potential returns per unit of risk. SPDR SP World is currently generating about 0.24 per unit of risk. If you would invest 15,109 in iSharesGlobal 100 on September 25, 2024 and sell it today you would earn a total of 1,259 from holding iSharesGlobal 100 or generate 8.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
iSharesGlobal 100 vs. SPDR SP World
Performance |
Timeline |
iSharesGlobal 100 |
SPDR SP World |
ISharesGlobal 100 and SPDR SP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ISharesGlobal 100 and SPDR SP
The main advantage of trading using opposite ISharesGlobal 100 and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISharesGlobal 100 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.ISharesGlobal 100 vs. VanEck Global Listed | ISharesGlobal 100 vs. BetaShares Crypto Innovators | ISharesGlobal 100 vs. BetaShares Global Government | ISharesGlobal 100 vs. BetaShares Geared Australian |
SPDR SP vs. VanEck Global Listed | SPDR SP vs. BetaShares Crypto Innovators | SPDR SP vs. BetaShares Global Government | SPDR SP vs. BetaShares Geared Australian |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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