Correlation Between SPDR DoubleLine and IShares ESG
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and IShares ESG 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 ESG 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 ESG 1 5, you can compare the effects of market volatilities on SPDR DoubleLine and IShares ESG 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 ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and IShares ESG.
Diversification Opportunities for SPDR DoubleLine and IShares ESG
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and IShares is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Short and iShares ESG 1 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG 1 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 ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG 1 has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and IShares ESG go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and IShares ESG
Given the investment horizon of 90 days SPDR DoubleLine is expected to generate 1.34 times less return on investment than IShares ESG. But when comparing it to its historical volatility, SPDR DoubleLine Short is 1.9 times less risky than IShares ESG. It trades about 0.24 of its potential returns per unit of risk. iShares ESG 1 5 is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,332 in iShares ESG 1 5 on January 25, 2024 and sell it today you would earn a total of 94.00 from holding iShares ESG 1 5 or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Short vs. iShares ESG 1 5
Performance |
| Timeline |
| SPDR DoubleLine Short |
| iShares ESG 1 |
SPDR DoubleLine and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and IShares ESG
The main advantage of trading using opposite SPDR DoubleLine and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, IShares ESG 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 ESG will offset losses from the drop in IShares ESG's long position.The idea behind SPDR DoubleLine Short and iShares ESG 1 5 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |