Correlation Between Arrow ETF and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both Arrow ETF 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 Arrow ETF and SPDR SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow ETF Trust and SPDR SSgA Global, you can compare the effects of market volatilities on Arrow ETF 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 Arrow ETF with a short position of SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow ETF and SPDR SSgA.
Diversification Opportunities for Arrow ETF and SPDR SSgA
Very weak diversification
The 3 months correlation between Arrow and SPDR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Arrow ETF Trust and SPDR SSgA Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Global and Arrow ETF 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 Arrow ETF Trust 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 Global has no effect on the direction of Arrow ETF i.e., Arrow ETF and SPDR SSgA go up and down completely randomly.
Pair Corralation between Arrow ETF and SPDR SSgA
Given the investment horizon of 90 days Arrow ETF Trust is expected to generate 1.22 times more return on investment than SPDR SSgA. However, Arrow ETF is 1.22 times more volatile than SPDR SSgA Global. It trades about 0.08 of its potential returns per unit of risk. SPDR SSgA Global is currently generating about 0.09 per unit of risk. If you would invest 1,192 in Arrow ETF Trust on September 1, 2024 and sell it today you would earn a total of 116.00 from holding Arrow ETF Trust or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow ETF Trust vs. SPDR SSgA Global
Performance |
| Timeline |
| Arrow ETF Trust |
| SPDR SSgA Global |
Arrow ETF and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow ETF and SPDR SSgA
The main advantage of trading using opposite Arrow ETF and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow ETF 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.| Arrow ETF vs. iShares Morningstar Multi Asset | Arrow ETF vs. Amplify High Income | Arrow ETF vs. First Trust Multi Asset | Arrow ETF vs. SPDR SSgA Income |
| 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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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