Correlation Between SSGA Active and BlackRock Intermediate
Can any of the company-specific risk be diversified away by investing in both SSGA Active and BlackRock Intermediate 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 Active and BlackRock Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSGA Active Trust and BlackRock Intermediate Muni, you can compare the effects of market volatilities on SSGA Active and BlackRock Intermediate 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 Active with a short position of BlackRock Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and BlackRock Intermediate.
Diversification Opportunities for SSGA Active and BlackRock Intermediate
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SSGA and BlackRock is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and BlackRock Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Intermediate and SSGA Active 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 Active Trust are associated (or correlated) with BlackRock Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Intermediate has no effect on the direction of SSGA Active i.e., SSGA Active and BlackRock Intermediate go up and down completely randomly.
Pair Corralation between SSGA Active and BlackRock Intermediate
Given the investment horizon of 90 days SSGA Active Trust is expected to generate 0.92 times more return on investment than BlackRock Intermediate. However, SSGA Active Trust is 1.09 times less risky than BlackRock Intermediate. It trades about 0.2 of its potential returns per unit of risk. BlackRock Intermediate Muni is currently generating about 0.08 per unit of risk. If you would invest 2,436 in SSGA Active Trust on August 30, 2024 and sell it today you would earn a total of 431.00 from holding SSGA Active Trust or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. BlackRock Intermediate Muni
Performance |
| Timeline |
| SSGA Active Trust |
| BlackRock Intermediate |
SSGA Active and BlackRock Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and BlackRock Intermediate
The main advantage of trading using opposite SSGA Active and BlackRock Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, BlackRock Intermediate 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 BlackRock Intermediate will offset losses from the drop in BlackRock Intermediate's long position.| SSGA Active vs. SPDR Bloomberg Barclays | SSGA Active vs. SPDR Blackstone Senior | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR Series Trust |
| BlackRock Intermediate vs. SSGA Active Trust | BlackRock Intermediate vs. SSGA Active Trust | BlackRock Intermediate vs. SPDR Nuveen Municipal |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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