Correlation Between SPDR Portfolio and IShares Russell
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio 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 Portfolio 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 Portfolio SP and iShares Russell Mid Cap, you can compare the effects of market volatilities on SPDR Portfolio 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 Portfolio with a short position of IShares Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and IShares Russell.
Diversification Opportunities for SPDR Portfolio and IShares Russell
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and IShares is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP 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 Portfolio 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 Portfolio SP 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 Portfolio i.e., SPDR Portfolio and IShares Russell go up and down completely randomly.
Pair Corralation between SPDR Portfolio and IShares Russell
Given the investment horizon of 90 days SPDR Portfolio SP is expected to under-perform the IShares Russell. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Portfolio SP is 1.11 times less risky than IShares Russell. The etf trades about -0.03 of its potential returns per unit of risk. The iShares Russell Mid Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13,870 in iShares Russell Mid Cap on September 6, 2025 and sell it today you would earn a total of 337.00 from holding iShares Russell Mid Cap or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio SP vs. iShares Russell Mid Cap
Performance |
| Timeline |
| SPDR Portfolio SP |
| iShares Russell Mid |
SPDR Portfolio and IShares Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and IShares Russell
The main advantage of trading using opposite SPDR Portfolio and IShares Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio 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 Portfolio vs. Strategy Shares | SPDR Portfolio vs. Freedom Day Dividend | SPDR Portfolio vs. Franklin Templeton ETF | SPDR Portfolio vs. iShares MSCI China |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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