Correlation Between ALABAMA TAX and SSGA Active
Can any of the company-specific risk be diversified away by investing in both ALABAMA TAX and SSGA Active 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 ALABAMA TAX and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALABAMA TAX FREE BOND and SSGA Active Trust, you can compare the effects of market volatilities on ALABAMA TAX and SSGA Active 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 ALABAMA TAX with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALABAMA TAX and SSGA Active.
Diversification Opportunities for ALABAMA TAX and SSGA Active
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between ALABAMA and SSGA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ALABAMA TAX FREE BOND and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust and ALABAMA TAX 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 ALABAMA TAX FREE BOND are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of ALABAMA TAX i.e., ALABAMA TAX and SSGA Active go up and down completely randomly.
Pair Corralation between ALABAMA TAX and SSGA Active
Assuming the 90 days horizon ALABAMA TAX FREE BOND is expected to generate 3.61 times more return on investment than SSGA Active. However, ALABAMA TAX is 3.61 times more volatile than SSGA Active Trust. It trades about 0.06 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.09 per unit of risk. If you would invest 1,107 in ALABAMA TAX FREE BOND on September 12, 2024 and sell it today you would earn a total of 154.00 from holding ALABAMA TAX FREE BOND or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALABAMA TAX FREE BOND vs. SSGA Active Trust
Performance |
| Timeline |
| ALABAMA TAX FREE |
| SSGA Active Trust |
ALABAMA TAX and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALABAMA TAX and SSGA Active
The main advantage of trading using opposite ALABAMA TAX and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALABAMA TAX position performs unexpectedly, SSGA Active 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 Active will offset losses from the drop in SSGA Active's long position.| ALABAMA TAX vs. FT Vest Equity | ALABAMA TAX vs. Zillow Group Class | ALABAMA TAX vs. Northern Lights | ALABAMA TAX vs. VanEck Vectors Moodys |
| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR MarketAxess Investment | SSGA Active vs. SSGA Active Trust |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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