Correlation Between IShares Core and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both IShares Core and SPDR SSgA 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 IShares Core and SPDR SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Growth and SPDR SSgA Income, you can compare the effects of market volatilities on IShares Core and SPDR SSgA 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 IShares Core with a short position of SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SPDR SSgA.
Diversification Opportunities for IShares Core and SPDR SSgA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and SPDR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Growth and SPDR SSgA Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Income and IShares Core 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 iShares Core Growth are associated (or correlated) with SPDR SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSgA Income has no effect on the direction of IShares Core i.e., IShares Core and SPDR SSgA go up and down completely randomly.
Pair Corralation between IShares Core and SPDR SSgA
Considering the 90-day investment horizon IShares Core is expected to generate 1.58 times less return on investment than SPDR SSgA. In addition to that, IShares Core is 1.29 times more volatile than SPDR SSgA Income. It trades about 0.09 of its total potential returns per unit of risk. SPDR SSgA Income is currently generating about 0.17 per unit of volatility. If you would invest 3,231 in SPDR SSgA Income on August 28, 2024 and sell it today you would earn a total of 41.00 from holding SPDR SSgA Income or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Growth vs. SPDR SSgA Income
Performance |
| Timeline |
| iShares Core Growth |
| SPDR SSgA Income |
IShares Core and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SPDR SSgA
The main advantage of trading using opposite IShares Core and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SPDR SSgA 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 SPDR SSgA will offset losses from the drop in SPDR SSgA's long position.| IShares Core vs. iShares Core Moderate | IShares Core vs. iShares Core Aggressive | IShares Core vs. iShares Core Conservative | IShares Core vs. Vanguard Mega Cap |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |