Correlation Between SPDR SP and Barclays Capital

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

By analyzing existing cross correlation between SPDR SP Metals and Barclays Capital, you can compare the effects of market volatilities on SPDR SP and Barclays Capital 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 SP with a short position of Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Barclays Capital.

Diversification Opportunities for SPDR SP and Barclays Capital

0.0

Correlation Coefficient

SPDR SP  Barclays Capital

Pay attention - limited upside

The 3 months correlation between SPDR and Barclays is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Metals and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and SPDR SP 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 SP Metals are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of SPDR SP i.e., SPDR SP and Barclays Capital go up and down completely randomly.

Pair Corralation between SPDR SP and Barclays Capital

If you would invest  5,974  in SPDR SP Metals on August 30, 2024 and sell it today you would earn a total of  869.00  from holding SPDR SP Metals or generate 14.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

SPDR SP Metals  vs.  Barclays Capital

SPDR SP Metals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, SPDR SP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Barclays Capital 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 SP and Barclays Capital

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

The idea behind SPDR SP Metals and Barclays Capital 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.