Correlation Between Barclays ETN and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both Barclays ETN 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 Barclays ETN and SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and SPDR SSGA Large, you can compare the effects of market volatilities on Barclays ETN 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 Barclays ETN with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and SPDR SSGA.
Diversification Opportunities for Barclays ETN and SPDR SSGA
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barclays and SPDR is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and SPDR SSGA Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Large and Barclays ETN 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 Barclays ETN Select 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 Large has no effect on the direction of Barclays ETN i.e., Barclays ETN and SPDR SSGA go up and down completely randomly.
Pair Corralation between Barclays ETN and SPDR SSGA
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.74 times more return on investment than SPDR SSGA. However, Barclays ETN is 1.74 times more volatile than SPDR SSGA Large. It trades about 0.25 of its potential returns per unit of risk. SPDR SSGA Large is currently generating about 0.01 per unit of risk. If you would invest 2,623 in Barclays ETN Select on October 26, 2024 and sell it today you would earn a total of 491.00 from holding Barclays ETN Select or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. SPDR SSGA Large
Performance |
| Timeline |
| Barclays ETN Select |
| SPDR SSGA Large |
Barclays ETN and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and SPDR SSGA
The main advantage of trading using opposite Barclays ETN and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN 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.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
| SPDR SSGA vs. SPDR SSGA Small | SPDR SSGA vs. SPDR MSCI USA | SPDR SSGA vs. Invesco SP MidCap | SPDR SSGA vs. Invesco SP SmallCap |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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