Correlation Between Capital Group and SSGA Active
Can any of the company-specific risk be diversified away by investing in both Capital Group 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 Capital Group and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group Municipal and SSGA Active Trust, you can compare the effects of market volatilities on Capital Group 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 Capital Group with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and SSGA Active.
Diversification Opportunities for Capital Group and SSGA Active
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and SSGA is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Municipal 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 Capital Group 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 Capital Group Municipal 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 Capital Group i.e., Capital Group and SSGA Active go up and down completely randomly.
Pair Corralation between Capital Group and SSGA Active
Given the investment horizon of 90 days Capital Group is expected to generate 1.01 times less return on investment than SSGA Active. In addition to that, Capital Group is 3.27 times more volatile than SSGA Active Trust. It trades about 0.12 of its total potential returns per unit of risk. SSGA Active Trust is currently generating about 0.38 per unit of volatility. If you would invest 2,838 in SSGA Active Trust on August 31, 2024 and sell it today you would earn a total of 29.00 from holding SSGA Active Trust or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Group Municipal vs. SSGA Active Trust
Performance |
| Timeline |
| Capital Group Municipal |
| SSGA Active Trust |
Capital Group and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and SSGA Active
The main advantage of trading using opposite Capital Group and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group 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.| Capital Group vs. iShares JP Morgan | Capital Group vs. iShares iBoxx Investment | Capital Group vs. SPDR Nuveen Bloomberg | Capital Group vs. iShares MBS ETF |
| SSGA Active vs. SPDR Bloomberg Barclays | SSGA Active vs. SPDR Blackstone Senior | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR Series 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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