Correlation Between SSgA SPDR and IShares IBonds
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and IShares IBonds 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 SSgA SPDR and IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSgA SPDR ETFs and iShares iBonds Dec, you can compare the effects of market volatilities on SSgA SPDR and IShares IBonds 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 SSgA SPDR with a short position of IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and IShares IBonds.
Diversification Opportunities for SSgA SPDR and IShares IBonds
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SSgA and IShares is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec and SSgA SPDR 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 SSgA SPDR ETFs are associated (or correlated) with IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds Dec has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and IShares IBonds go up and down completely randomly.
Pair Corralation between SSgA SPDR and IShares IBonds
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 1.6 times more return on investment than IShares IBonds. However, SSgA SPDR is 1.6 times more volatile than iShares iBonds Dec. It trades about 0.08 of its potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.08 per unit of risk. If you would invest 5,160 in SSgA SPDR ETFs on September 20, 2024 and sell it today you would earn a total of 65.00 from holding SSgA SPDR ETFs or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. iShares iBonds Dec
Performance |
| Timeline |
| SSgA SPDR ETFs |
| iShares iBonds Dec |
SSgA SPDR and IShares IBonds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and IShares IBonds
The main advantage of trading using opposite SSgA SPDR and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, IShares IBonds 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 IShares IBonds will offset losses from the drop in IShares IBonds' long position.| SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Japan | SSgA SPDR vs. Lyxor UCITS Stoxx | SSgA SPDR vs. Gold Bullion Securities |
| IShares IBonds vs. Lyxor UCITS Japan | IShares IBonds vs. Lyxor UCITS Japan | IShares IBonds vs. Lyxor UCITS Stoxx | IShares IBonds vs. Amundi CAC 40 |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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