Correlation Between SPDR Nuveen and International Drawdown

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

By analyzing existing cross correlation between SPDR Nuveen Municipal and International Drawdown Managed, you can compare the effects of market volatilities on SPDR Nuveen and International Drawdown 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 Nuveen with a short position of International Drawdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and International Drawdown.

Diversification Opportunities for SPDR Nuveen and International Drawdown

0.26

Correlation Coefficient

SPDR Nuveen  International Drawdown

Modest diversification

The 3 months correlation between SPDR and International is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Municipal and International Drawdown Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Drawdown and SPDR Nuveen 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 Nuveen Municipal are associated (or correlated) with International Drawdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Drawdown has no effect on the direction of SPDR Nuveen i.e., SPDR Nuveen and International Drawdown go up and down completely randomly.

Pair Corralation between SPDR Nuveen and International Drawdown

Given the investment horizon of 90 days SPDR Nuveen Municipal is expected to under-perform the International Drawdown. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Nuveen Municipal is 2.99 times less risky than International Drawdown. The etf trades about -0.01 of its potential returns per unit of risk. The International Drawdown Managed is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,114  in International Drawdown Managed on September 16, 2024 and sell it today you would lose (5.00) from holding International Drawdown Managed or give up 0.24% of portfolio value over 90 days.

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

SPDR Nuveen Municipal  vs.  International Drawdown Managed

SPDR Nuveen Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Nuveen Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SPDR Nuveen is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

International Drawdown

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Drawdown Managed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, International Drawdown is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR Nuveen and International Drawdown

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

The idea behind SPDR Nuveen Municipal and International Drawdown Managed 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.