Correlation Between Alpha Architect and SSgA
Can any of the company-specific risk be diversified away by investing in both Alpha Architect and 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 Alpha Architect and SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Architect Gdsdn and SSgA, you can compare the effects of market volatilities on Alpha Architect and 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 Alpha Architect with a short position of SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Architect and SSgA.
Diversification Opportunities for Alpha Architect and SSgA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alpha and SSgA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Architect Gdsdn and SSgA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA and Alpha Architect 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 Alpha Architect Gdsdn are associated (or correlated) with SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA has no effect on the direction of Alpha Architect i.e., Alpha Architect and SSgA go up and down completely randomly.
Pair Corralation between Alpha Architect and SSgA
If you would invest 2,934 in Alpha Architect Gdsdn on September 3, 2024 and sell it today you would earn a total of 375.00 from holding Alpha Architect Gdsdn or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Alpha Architect Gdsdn vs. SSgA
Performance |
| Timeline |
| Alpha Architect Gdsdn |
| SSgA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alpha Architect and SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Architect and SSgA
The main advantage of trading using opposite Alpha Architect and SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Architect position performs unexpectedly, 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 SSgA will offset losses from the drop in SSgA's long position.| Alpha Architect vs. Janus Henderson Mortgage Backed | Alpha Architect vs. LeaderSharesTM AlphaFactor Core | Alpha Architect vs. ClearShares Ultra Short Maturity | Alpha Architect vs. Hartford Short Duration |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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