Correlation Between SPDR Dow and Vanguard Dividend
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and Vanguard Dividend 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 Vanguard Dividend 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 Vanguard Dividend Growth, you can compare the effects of market volatilities on SPDR Dow and Vanguard Dividend 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 Vanguard Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and Vanguard Dividend.
Diversification Opportunities for SPDR Dow and Vanguard Dividend
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Vanguard is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and Vanguard Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Dividend Growth 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 Vanguard Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Dividend Growth has no effect on the direction of SPDR Dow i.e., SPDR Dow and Vanguard Dividend go up and down completely randomly.
Pair Corralation between SPDR Dow and Vanguard Dividend
Considering the 90-day investment horizon SPDR Dow Jones is expected to generate 1.27 times more return on investment than Vanguard Dividend. However, SPDR Dow is 1.27 times more volatile than Vanguard Dividend Growth. It trades about 0.08 of its potential returns per unit of risk. Vanguard Dividend Growth is currently generating about 0.0 per unit of risk. If you would invest 44,652 in SPDR Dow Jones on August 21, 2025 and sell it today you would earn a total of 1,478 from holding SPDR Dow Jones or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. Vanguard Dividend Growth
Performance |
| Timeline |
| SPDR Dow Jones |
| Vanguard Dividend Growth |
SPDR Dow and Vanguard Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and Vanguard Dividend
The main advantage of trading using opposite SPDR Dow and Vanguard Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, Vanguard Dividend 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 Dividend will offset losses from the drop in Vanguard Dividend's long position.| SPDR Dow vs. Dimensional Core Equity | SPDR Dow vs. Vanguard Small Cap Growth | SPDR Dow vs. Vanguard Small Cap Growth | SPDR Dow vs. Schwab Broad Market |
| Vanguard Dividend vs. iShares Russell Mid Cap | Vanguard Dividend vs. Financial Select Sector | Vanguard Dividend vs. iShares Russell 1000 | Vanguard Dividend vs. iShares SP 500 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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