Correlation Between Cardano and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Cardano and SSgA SPDR 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 Cardano and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and SSgA SPDR ETFs, you can compare the effects of market volatilities on Cardano and SSgA SPDR 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 Cardano with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and SSgA SPDR.
Diversification Opportunities for Cardano and SSgA SPDR
Good diversification
The 3 months correlation between Cardano and SSgA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and Cardano 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 Cardano are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Cardano i.e., Cardano and SSgA SPDR go up and down completely randomly.
Pair Corralation between Cardano and SSgA SPDR
Assuming the 90 days trading horizon Cardano is expected to generate 6.97 times more return on investment than SSgA SPDR. However, Cardano is 6.97 times more volatile than SSgA SPDR ETFs. It trades about 0.19 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.03 per unit of risk. If you would invest 32.00 in Cardano on November 2, 2024 and sell it today you would earn a total of 64.00 from holding Cardano or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.13% |
| Values | Daily Returns |
Cardano vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Cardano |
| SSgA SPDR ETFs |
Cardano and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and SSgA SPDR
The main advantage of trading using opposite Cardano and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.The idea behind Cardano and SSgA SPDR ETFs 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.| SSgA SPDR vs. Vanguard SP 500 | SSgA SPDR vs. SPDR Dow Jones | SSgA SPDR vs. iShares Core MSCI | SSgA SPDR vs. iShares SP 500 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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