Correlation Between FT Vest and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both FT Vest and SPDR MSCI 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 FT Vest and SPDR MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Vest Equity and SPDR MSCI ACWI, you can compare the effects of market volatilities on FT Vest and SPDR MSCI 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 FT Vest with a short position of SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and SPDR MSCI.
Diversification Opportunities for FT Vest and SPDR MSCI
Almost no diversification
The 3 months correlation between DHDG and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Equity and SPDR MSCI ACWI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI ACWI and FT Vest 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 FT Vest Equity are associated (or correlated) with SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI ACWI has no effect on the direction of FT Vest i.e., FT Vest and SPDR MSCI go up and down completely randomly.
Pair Corralation between FT Vest and SPDR MSCI
Given the investment horizon of 90 days FT Vest is expected to generate 2.27 times less return on investment than SPDR MSCI. But when comparing it to its historical volatility, FT Vest Equity is 3.83 times less risky than SPDR MSCI. It trades about 0.38 of its potential returns per unit of risk. SPDR MSCI ACWI is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,996 in SPDR MSCI ACWI on April 30, 2025 and sell it today you would earn a total of 292.00 from holding SPDR MSCI ACWI or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FT Vest Equity vs. SPDR MSCI ACWI
Performance |
| Timeline |
| FT Vest Equity |
| SPDR MSCI ACWI |
FT Vest and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Vest and SPDR MSCI
The main advantage of trading using opposite FT Vest and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Vest position performs unexpectedly, SPDR MSCI 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 SPDR MSCI will offset losses from the drop in SPDR MSCI's long position.| FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest vs. Horizon Funds | FT Vest vs. First Trust Exchange Traded |
| SPDR MSCI vs. SPDR SP International | SPDR MSCI vs. SPDR SP Emerging | SPDR MSCI vs. SPDR Global Dow | SPDR MSCI vs. SPDR SP Global |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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