Correlation Between SPDR Bloomberg and Global X

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

By analyzing existing cross correlation between SPDR Bloomberg High and Global X SuperIncome, you can compare the effects of market volatilities on SPDR Bloomberg and Global X 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 Bloomberg with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and Global X.

Diversification Opportunities for SPDR Bloomberg and Global X

0.46

Correlation Coefficient

SPDR Bloomberg  Global X

Very weak diversification

The 3 months correlation between SPDR and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg High and Global X SuperIncome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperIncome and SPDR Bloomberg 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 Bloomberg High are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SuperIncome has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and Global X go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and Global X

Considering the 90-day investment horizon SPDR Bloomberg High is expected to generate 0.51 times more return on investment than Global X. However, SPDR Bloomberg High is 1.96 times less risky than Global X. It trades about 0.08 of its potential returns per unit of risk. Global X SuperIncome is currently generating about 0.02 per unit of risk. If you would invest  8,231  in SPDR Bloomberg High on October 4, 2024 and sell it today you would earn a total of  1,316  from holding SPDR Bloomberg High or generate 15.99% return on investment over 90 days.

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

SPDR Bloomberg High  vs.  Global X SuperIncome

SPDR Bloomberg High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR Bloomberg High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Global X SuperIncome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X SuperIncome has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Global X is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SPDR Bloomberg and Global X

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

The idea behind SPDR Bloomberg High and Global X SuperIncome 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.