Correlation Between SSGA Active and VanEck Intermediate
Can any of the company-specific risk be diversified away by investing in both SSGA Active and VanEck 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 VanEck 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 VanEck Intermediate Muni, you can compare the effects of market volatilities on SSGA Active and VanEck 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 VanEck Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and VanEck Intermediate.
Diversification Opportunities for SSGA Active and VanEck Intermediate
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SSGA and VanEck is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and VanEck Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Intermediate Muni 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 VanEck Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Intermediate Muni has no effect on the direction of SSGA Active i.e., SSGA Active and VanEck Intermediate go up and down completely randomly.
Pair Corralation between SSGA Active and VanEck Intermediate
Given the investment horizon of 90 days SSGA Active Trust is expected to generate 0.32 times more return on investment than VanEck Intermediate. However, SSGA Active Trust is 3.15 times less risky than VanEck Intermediate. It trades about 0.28 of its potential returns per unit of risk. VanEck Intermediate Muni is currently generating about 0.07 per unit of risk. If you would invest 2,839 in SSGA Active Trust on August 25, 2024 and sell it today you would earn a total of 21.00 from holding SSGA Active Trust or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SSGA Active Trust vs. VanEck Intermediate Muni
Performance |
| Timeline |
| SSGA Active Trust |
| VanEck Intermediate Muni |
SSGA Active and VanEck Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and VanEck Intermediate
The main advantage of trading using opposite SSGA Active and VanEck Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, VanEck 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 VanEck Intermediate will offset losses from the drop in VanEck Intermediate's long position.| SSGA Active vs. First Trust Senior | SSGA Active vs. First Trust Low | SSGA Active vs. First Trust Enhanced | SSGA Active vs. First Trust TCW |
| VanEck Intermediate vs. BlackRock Intermediate Muni | VanEck Intermediate vs. SSGA Active Trust | VanEck Intermediate vs. SPDR MarketAxess Investment | VanEck Intermediate vs. SSGA Active Trust |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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