Correlation Between SPDR DoubleLine and IShares Silver
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and IShares Silver 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 DoubleLine and IShares Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Short and iShares Silver Trust, you can compare the effects of market volatilities on SPDR DoubleLine and IShares Silver 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 DoubleLine with a short position of IShares Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and IShares Silver.
Diversification Opportunities for SPDR DoubleLine and IShares Silver
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and iShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Silver Trust and SPDR DoubleLine 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 DoubleLine Short are associated (or correlated) with IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Silver Trust has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and IShares Silver go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and IShares Silver
Given the investment horizon of 90 days SPDR DoubleLine Short is expected to under-perform the IShares Silver. But the etf apears to be less risky and, when comparing its historical volatility, SPDR DoubleLine Short is 22.79 times less risky than IShares Silver. The etf trades about -0.07 of its potential returns per unit of risk. The iShares Silver Trust is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,258 in iShares Silver Trust on January 25, 2024 and sell it today you would earn a total of 241.00 from holding iShares Silver Trust or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR DoubleLine Short vs. iShares Silver Trust
Performance |
| Timeline |
| SPDR DoubleLine Short |
| iShares Silver Trust |
SPDR DoubleLine and IShares Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and IShares Silver
The main advantage of trading using opposite SPDR DoubleLine and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, IShares Silver 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 IShares Silver will offset losses from the drop in IShares Silver's long position.The idea behind SPDR DoubleLine Short and iShares Silver Trust 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.| IShares Silver vs. HUMANA INC | IShares Silver vs. Aquagold International | IShares Silver vs. Barloworld Ltd ADR | IShares Silver vs. Morningstar Unconstrained Allocation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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