Correlation Between Absolute Convertible and Ssga International
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Ssga International 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 Absolute Convertible and Ssga International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Ssga International Stock, you can compare the effects of market volatilities on Absolute Convertible and Ssga International 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 Absolute Convertible with a short position of Ssga International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Ssga International.
Diversification Opportunities for Absolute Convertible and Ssga International
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Absolute and Ssga is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Ssga International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga International Stock and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Ssga International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga International Stock has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Ssga International go up and down completely randomly.
Pair Corralation between Absolute Convertible and Ssga International
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.07 times more return on investment than Ssga International. However, Absolute Convertible Arbitrage is 15.26 times less risky than Ssga International. It trades about 0.58 of its potential returns per unit of risk. Ssga International Stock is currently generating about 0.02 per unit of risk. If you would invest 1,143 in Absolute Convertible Arbitrage on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Absolute Convertible Arbitrage or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Ssga International Stock
Performance |
| Timeline |
| Absolute Convertible |
| Ssga International Stock |
Absolute Convertible and Ssga International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Ssga International
The main advantage of trading using opposite Absolute Convertible and Ssga International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Ssga International 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 International will offset losses from the drop in Ssga International's long position.| Absolute Convertible vs. Angel Oak Multi Strategy | Absolute Convertible vs. Transamerica Emerging Markets | Absolute Convertible vs. Black Oak Emerging | Absolute Convertible vs. Barings Emerging Markets |
| Ssga International vs. Lord Abbett Convertible | Ssga International vs. Advent Claymore Convertible | Ssga International vs. Virtus Convertible | Ssga International vs. Absolute Convertible Arbitrage |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges |