Equal-Weight S&P 500 (RSP) vs Developed ex-US (EFA)
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
RSP gives each S&P 500 name equal weight, stripping out AI-driven mega-cap tech distortion. If even RSP outperforms EFA, US breadth is genuinely leading (not just Magnificent Seven). If EFA outperforms RSP while cap-weighted SPY lags EFA, US mega-cap tech is the only thing keeping SPY competitive.
Cross-Asset Analysis
To orient the reader: S&P 500 Equal Weight (RSP) represents equal-weight S&P 500, measures market breadth vs cap-weighted SPY and EAFE Developed (EFA) represents iShares MSCI EAFE ETF, developed markets excluding US and Canada, which is why this comparison sits in the peer pair category on Convex. Overlay strategies trade the S&P 500 Equal Weight (RSP)-EAFE Developed (EFA) spread through options or swaps when the underlying pair is directly tradable, sizing against realized spread volatility. Pairs trading between S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) is common because the spread is more stationary than either individual price, suitable for mean-reversion strategies.
Idiosyncratic events in a concentrated peer, such as a single mega-cap earnings miss inside S&P 500 Equal Weight (RSP), can move the S&P 500 Equal Weight (RSP)-EAFE Developed (EFA) spread without broader factor signal. S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) occupy the same asset class, and the relative performance between them isolates the specific factor that distinguishes one from the other. Mid-cycle stretches see the S&P 500 Equal Weight (RSP)-EAFE Developed (EFA) spread compress as macro volatility stays low and factor returns normalize.
Corporate action events, including buybacks or spin-offs affecting constituents of S&P 500 Equal Weight (RSP) or EAFE Developed (EFA), can distort the spread relative to its intended factor tilt. Factor tilts expressed through the S&P 500 Equal Weight (RSP)-EAFE Developed (EFA) selection allow managers to adjust style exposure without changing their overall asset allocation.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between S&P 500 Equal Weight (RSP) and EAFE Developed (EFA)?+
S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) captures the specific macro signal that flows through this relationship.
When does S&P 500 Equal Weight (RSP) typically lead EAFE Developed (EFA)?+
S&P 500 Equal Weight (RSP) tends to lead EAFE Developed (EFA) during rotation episodes between the two factor exposures. In those periods, moves in S&P 500 Equal Weight (RSP) precede corresponding moves in EAFE Developed (EFA) by days to weeks, depending on the transmission channel and the depth of each market.
How are S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) historically correlated?+
Long-run correlation between S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the S&P 500 Equal Weight (RSP)-EAFE Developed (EFA) relationship.
What macro conditions drive divergence between S&P 500 Equal Weight (RSP) and EAFE Developed (EFA)?+
Divergence between S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in S&P 500 Equal Weight (RSP) or EAFE Developed (EFA).
Is S&P 500 Equal Weight (RSP) a hedge for EAFE Developed (EFA)?+
Peers like S&P 500 Equal Weight (RSP) and EAFE Developed (EFA) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the S&P 500 Equal Weight (RSP)-EAFE Developed (EFA) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.