Correlation Between Astar and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and SPDR SSGA My2028, you can compare the effects of market volatilities on Astar 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 Astar with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and SPDR SSGA.
Diversification Opportunities for Astar and SPDR SSGA
Poor diversification
The 3 months correlation between Astar and SPDR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Astar and SPDR SSGA My2028 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2028 and Astar 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 Astar 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 My2028 has no effect on the direction of Astar i.e., Astar and SPDR SSGA go up and down completely randomly.
Pair Corralation between Astar and SPDR SSGA
Assuming the 90 days trading horizon Astar is expected to under-perform the SPDR SSGA. In addition to that, Astar is 33.54 times more volatile than SPDR SSGA My2028. It trades about -0.15 of its total potential returns per unit of risk. SPDR SSGA My2028 is currently generating about 0.08 per unit of volatility. If you would invest 2,456 in SPDR SSGA My2028 on October 25, 2024 and sell it today you would earn a total of 5.00 from holding SPDR SSGA My2028 or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Astar vs. SPDR SSGA My2028
Performance |
| Timeline |
| Astar |
| SPDR SSGA My2028 |
Astar and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and SPDR SSGA
The main advantage of trading using opposite Astar and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and SPDR SSGA My2028 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.| SPDR SSGA vs. VanEck Vectors Moodys | SPDR SSGA vs. Valued Advisers Trust | SPDR SSGA vs. Xtrackers California Municipal | SPDR SSGA vs. Principal Exchange Traded Funds |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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