Correlation Between SPDR SSgA and ClearShares OCIO
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA and ClearShares OCIO 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 SSgA and ClearShares OCIO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSgA Income and ClearShares OCIO ETF, you can compare the effects of market volatilities on SPDR SSgA and ClearShares OCIO 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 SSgA with a short position of ClearShares OCIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and ClearShares OCIO.
Diversification Opportunities for SPDR SSgA and ClearShares OCIO
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and ClearShares is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Income and ClearShares OCIO ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearShares OCIO ETF and SPDR SSgA 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 SSgA Income are associated (or correlated) with ClearShares OCIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearShares OCIO ETF has no effect on the direction of SPDR SSgA i.e., SPDR SSgA and ClearShares OCIO go up and down completely randomly.
Pair Corralation between SPDR SSgA and ClearShares OCIO
Given the investment horizon of 90 days SPDR SSgA is expected to generate 2.78 times less return on investment than ClearShares OCIO. But when comparing it to its historical volatility, SPDR SSgA Income is 1.72 times less risky than ClearShares OCIO. It trades about 0.06 of its potential returns per unit of risk. ClearShares OCIO ETF is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,398 in ClearShares OCIO ETF on August 24, 2024 and sell it today you would earn a total of 38.00 from holding ClearShares OCIO ETF or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSgA Income vs. ClearShares OCIO ETF
Performance |
| Timeline |
| SPDR SSgA Income |
| ClearShares OCIO ETF |
SPDR SSgA and ClearShares OCIO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and ClearShares OCIO
The main advantage of trading using opposite SPDR SSgA and ClearShares OCIO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA position performs unexpectedly, ClearShares OCIO 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 ClearShares OCIO will offset losses from the drop in ClearShares OCIO's long position.| SPDR SSgA vs. First Trust Multi Asset | SPDR SSgA vs. Collaborative Investment Series | SPDR SSgA vs. Akros Monthly Payout | SPDR SSgA vs. Northern Lights |
| ClearShares OCIO vs. ClearShares Ultra Short Maturity | ClearShares OCIO vs. Opus Small Cap | ClearShares OCIO vs. SPDR SSgA Income |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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