Correlation Between Disney and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and SPDR SSGA Small, you can compare the effects of market volatilities on Disney 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 Disney with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and SPDR SSGA.
Diversification Opportunities for Disney and SPDR SSGA
Very poor diversification
The 3 months correlation between Disney and SPDR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and SPDR SSGA Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Small and Disney 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 Walt Disney 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 Small has no effect on the direction of Disney i.e., Disney and SPDR SSGA go up and down completely randomly.
Pair Corralation between Disney and SPDR SSGA
Considering the 90-day investment horizon Walt Disney is expected to generate 0.82 times more return on investment than SPDR SSGA. However, Walt Disney is 1.21 times less risky than SPDR SSGA. It trades about 0.45 of its potential returns per unit of risk. SPDR SSGA Small is currently generating about 0.2 per unit of risk. If you would invest 9,620 in Walt Disney on August 28, 2024 and sell it today you would earn a total of 1,925 from holding Walt Disney or generate 20.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walt Disney vs. SPDR SSGA Small
Performance |
| Timeline |
| Walt Disney |
| SPDR SSGA Small |
Disney and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and SPDR SSGA
The main advantage of trading using opposite Disney and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| SPDR SSGA vs. SPDR SSGA Large | SPDR SSGA vs. Invesco SP SmallCap | SPDR SSGA vs. Invesco SP MidCap | SPDR SSGA vs. SPDR MSCI EAFE |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |