Correlation Between SP Global and CME
Can any of the company-specific risk be diversified away by investing in both SP Global and CME 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 SP Global and CME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and CME Group, you can compare the effects of market volatilities on SP Global and CME 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 SP Global with a short position of CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and CME.
Diversification Opportunities for SP Global and CME
Weak diversification
The 3 months correlation between SPGI and CME is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SP Global and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group and SP Global 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 SP Global are associated (or correlated) with CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of SP Global i.e., SP Global and CME go up and down completely randomly.
Pair Corralation between SP Global and CME
Given the investment horizon of 90 days SP Global is expected to under-perform the CME. In addition to that, SP Global is 1.33 times more volatile than CME Group. It trades about -0.11 of its total potential returns per unit of risk. CME Group is currently generating about -0.06 per unit of volatility. If you would invest 27,339 in CME Group on July 18, 2025 and sell it today you would lose (1,088) from holding CME Group or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Global vs. CME Group
Performance |
| Timeline |
| SP Global |
| CME Group |
SP Global and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and CME
The main advantage of trading using opposite SP Global and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| SP Global vs. MSCI Inc | SP Global vs. Nasdaq Inc | SP Global vs. Intercontinental Exchange | SP Global vs. CME Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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