Correlation Between SPDR MSCI and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and SPDR Dow 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 MSCI and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Europe and SPDR Dow Jones, you can compare the effects of market volatilities on SPDR MSCI and SPDR Dow 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 MSCI with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and SPDR Dow.
Diversification Opportunities for SPDR MSCI and SPDR Dow
Weak diversification
The 3 months correlation between SPDR and SPDR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Europe and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and SPDR MSCI 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 MSCI Europe are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and SPDR Dow go up and down completely randomly.
Pair Corralation between SPDR MSCI and SPDR Dow
If you would invest 4,632 in SPDR MSCI Europe on December 4, 2024 and sell it today you would earn a total of 701.00 from holding SPDR MSCI Europe or generate 15.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.31% |
Values | Daily Returns |
SPDR MSCI Europe vs. SPDR Dow Jones
Performance |
Timeline |
SPDR MSCI Europe |
SPDR Dow Jones |
SPDR MSCI and SPDR Dow Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR MSCI and SPDR Dow
The main advantage of trading using opposite SPDR MSCI and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, SPDR Dow 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 Dow will offset losses from the drop in SPDR Dow's long position.SPDR MSCI vs. SPDR SP Utilities | SPDR MSCI vs. SPDR MSCI Europe | SPDR MSCI vs. SPDR MSCI EM | SPDR MSCI vs. SPDR Bloomberg Global |
SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR SP Utilities | SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR MSCI EM |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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