Correlation Between SPDR SSgA and IShares Core
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA and IShares Core 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 SPDR SSgA and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSgA Global and iShares Core Aggressive, you can compare the effects of market volatilities on SPDR SSgA and IShares Core 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 SPDR SSgA with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and IShares Core.
Diversification Opportunities for SPDR SSgA and IShares Core
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and IShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Global and iShares Core Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Aggressive and SPDR SSgA 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 SPDR SSgA Global are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Aggressive has no effect on the direction of SPDR SSgA i.e., SPDR SSgA and IShares Core go up and down completely randomly.
Pair Corralation between SPDR SSgA and IShares Core
Considering the 90-day investment horizon SPDR SSgA is expected to generate 1.08 times less return on investment than IShares Core. But when comparing it to its historical volatility, SPDR SSgA Global is 1.35 times less risky than IShares Core. It trades about 0.04 of its potential returns per unit of risk. iShares Core Aggressive is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,809 in iShares Core Aggressive on August 27, 2024 and sell it today you would earn a total of 27.00 from holding iShares Core Aggressive or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSgA Global vs. iShares Core Aggressive
Performance |
| Timeline |
| SPDR SSgA Global |
| iShares Core Aggressive |
SPDR SSgA and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and IShares Core
The main advantage of trading using opposite SPDR SSgA and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA position performs unexpectedly, IShares Core 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 Core will offset losses from the drop in IShares Core's long position.| SPDR SSgA vs. SPDR SSgA Income | SPDR SSgA vs. SPDR SSgA Multi Asset | SPDR SSgA vs. SPDR Bloomberg International | SPDR SSgA vs. SPDR Bloomberg Emerging |
| IShares Core vs. iShares Core Growth | IShares Core vs. iShares Core Moderate | IShares Core vs. iShares Core Conservative | IShares Core vs. iShares Core Total |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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