Correlation Between SPDR Bloomberg and First Trust
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and First Trust 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 Bloomberg and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg High and First Trust Tactical, you can compare the effects of market volatilities on SPDR Bloomberg and First Trust 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 Bloomberg with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and First Trust.
Diversification Opportunities for SPDR Bloomberg and First Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and First is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg High and First Trust Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Tactical and SPDR Bloomberg 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 Bloomberg High are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Tactical has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and First Trust go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and First Trust
Considering the 90-day investment horizon SPDR Bloomberg High is expected to generate 1.13 times more return on investment than First Trust. However, SPDR Bloomberg is 1.13 times more volatile than First Trust Tactical. It trades about 0.1 of its potential returns per unit of risk. First Trust Tactical is currently generating about 0.11 per unit of risk. If you would invest 8,062 in SPDR Bloomberg High on April 4, 2025 and sell it today you would earn a total of 1,625 from holding SPDR Bloomberg High or generate 20.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg High vs. First Trust Tactical
Performance |
| Timeline |
| SPDR Bloomberg High |
| First Trust Tactical |
SPDR Bloomberg and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and First Trust
The main advantage of trading using opposite SPDR Bloomberg and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| SPDR Bloomberg vs. BondBloxx ETF Trust | SPDR Bloomberg vs. Virtus ETF Trust | SPDR Bloomberg vs. Ocean Park High | SPDR Bloomberg vs. TCW ETF Trust |
| First Trust vs. BondBloxx ETF Trust | First Trust vs. Virtus ETF Trust | First Trust vs. Ocean Park High | First Trust vs. TCW ETF Trust |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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