Correlation Between SPDR Gold and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both SPDR Gold and SSgA SPDR 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 Gold and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Shares and SSgA SPDR ETFs, you can compare the effects of market volatilities on SPDR Gold and SSgA SPDR 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 Gold with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and SSgA SPDR.
Diversification Opportunities for SPDR Gold and SSgA SPDR
Very poor diversification
The 3 months correlation between SPDR and SSgA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and SPDR Gold 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 Gold Shares are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of SPDR Gold i.e., SPDR Gold and SSgA SPDR go up and down completely randomly.
Pair Corralation between SPDR Gold and SSgA SPDR
Assuming the 90 days trading horizon SPDR Gold is expected to generate 81.88 times less return on investment than SSgA SPDR. In addition to that, SPDR Gold is 2.18 times more volatile than SSgA SPDR ETFs. It trades about 0.0 of its total potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.35 per unit of volatility. If you would invest 3,768 in SSgA SPDR ETFs on September 1, 2024 and sell it today you would earn a total of 165.00 from holding SSgA SPDR ETFs or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Shares vs. SSgA SPDR ETFs
Performance |
| Timeline |
| SPDR Gold Shares |
| SSgA SPDR ETFs |
SPDR Gold and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and SSgA SPDR
The main advantage of trading using opposite SPDR Gold and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold position performs unexpectedly, SSgA SPDR 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 SPDR will offset losses from the drop in SSgA SPDR's long position.| SPDR Gold vs. SPDR Barclays 10 | SPDR Gold vs. SPDR ICE BofA | SPDR Gold vs. SPDR SP Utilities | SPDR Gold vs. SPDR ICE BofA |
| SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR SP |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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