Correlation Between SPDR SP and Global X

Can any of the company-specific risk be diversified away by investing in both SPDR SP and Global X 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 SP and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR SP Bank and Global X Blockchain, you can compare the effects of market volatilities on SPDR SP and Global X 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 SP with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Global X.

Diversification Opportunities for SPDR SP and Global X

0.74

Correlation Coefficient

SPDR SP  Global X

Poor diversification

The 3 months correlation between SPDR and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Bank and Global X Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Blockchain and SPDR SP 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 SP Bank are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Blockchain has no effect on the direction of SPDR SP i.e., SPDR SP and Global X go up and down completely randomly.

Pair Corralation between SPDR SP and Global X

Considering the 90-day investment horizon SPDR SP is expected to generate 20.31 times less return on investment than Global X. But when comparing it to its historical volatility, SPDR SP Bank is 2.17 times less risky than Global X. It trades about 0.0 of its potential returns per unit of risk. Global X Blockchain is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,309  in Global X Blockchain on March 5, 2025 and sell it today you would earn a total of  203.00  from holding Global X Blockchain or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SPDR SP Bank  vs.  Global X Blockchain

SPDR SP Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR SP Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, SPDR SP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global X Blockchain

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Blockchain are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with SPDR SP and Global X

The main advantage of trading using opposite SPDR SP and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.

The idea behind SPDR SP Bank and Global X Blockchain pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.