Correlation Between SPDR Dow and IShares Russell
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and IShares Russell 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 Dow and IShares Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and iShares Russell Mid Cap, you can compare the effects of market volatilities on SPDR Dow and IShares Russell 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 Dow with a short position of IShares Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and IShares Russell.
Diversification Opportunities for SPDR Dow and IShares Russell
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPDR and IShares is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and iShares Russell Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Russell Mid and SPDR Dow 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 Dow Jones are associated (or correlated) with IShares Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Russell Mid has no effect on the direction of SPDR Dow i.e., SPDR Dow and IShares Russell go up and down completely randomly.
Pair Corralation between SPDR Dow and IShares Russell
Considering the 90-day investment horizon SPDR Dow Jones is expected to generate 0.86 times more return on investment than IShares Russell. However, SPDR Dow Jones is 1.16 times less risky than IShares Russell. It trades about 0.07 of its potential returns per unit of risk. iShares Russell Mid Cap is currently generating about 0.06 per unit of risk. If you would invest 36,189 in SPDR Dow Jones on September 6, 2025 and sell it today you would earn a total of 11,814 from holding SPDR Dow Jones or generate 32.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. iShares Russell Mid Cap
Performance |
| Timeline |
| SPDR Dow Jones |
| iShares Russell Mid |
SPDR Dow and IShares Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and IShares Russell
The main advantage of trading using opposite SPDR Dow and IShares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, IShares Russell 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 Russell will offset losses from the drop in IShares Russell's long position.| SPDR Dow vs. FT Vest Equity | SPDR Dow vs. Northern Lights | SPDR Dow vs. Diamond Hill Funds | SPDR Dow vs. Dimensional International High |
| IShares Russell vs. FT Vest Equity | IShares Russell vs. Northern Lights | IShares Russell vs. Diamond Hill Funds | IShares Russell vs. Dimensional International High |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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