Correlation Between SPDR Barclays and Vanguard Total

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Vanguard Total 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 Barclays and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and Vanguard Total Corporate, you can compare the effects of market volatilities on SPDR Barclays and Vanguard Total 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 Barclays with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Vanguard Total.

Diversification Opportunities for SPDR Barclays and Vanguard Total

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between SPDR and Vanguard is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and Vanguard Total Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Corporate and SPDR Barclays 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 Barclays Intermediate are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Corporate has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Vanguard Total go up and down completely randomly.

Pair Corralation between SPDR Barclays and Vanguard Total

Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.65 times more return on investment than Vanguard Total. However, SPDR Barclays Intermediate is 1.53 times less risky than Vanguard Total. It trades about 0.03 of its potential returns per unit of risk. Vanguard Total Corporate is currently generating about 0.01 per unit of risk. If you would invest  3,130  in SPDR Barclays Intermediate on December 30, 2023 and sell it today you would earn a total of  139.00  from holding SPDR Barclays Intermediate or generate 4.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

SPDR Barclays Intermediate  vs.  Vanguard Total Corporate

 Performance 
       Timeline  
SPDR Barclays Interm 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Barclays Intermediate are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, SPDR Barclays is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Vanguard Total Corporate 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Vanguard Total Corporate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vanguard Total is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SPDR Barclays and Vanguard Total Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPDR Barclays and Vanguard Total

The main advantage of trading using opposite SPDR Barclays and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.
The idea behind SPDR Barclays Intermediate and Vanguard Total Corporate 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.
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

Other Complementary Tools

Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Share Portfolio
Track or share privately all of your investments from the convenience of any device