Correlation Between Inflation Protected and Ssga International
Can any of the company-specific risk be diversified away by investing in both Inflation Protected and Ssga International 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 Inflation Protected and Ssga International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflation Protected Bond Fund and Ssga International Stock, you can compare the effects of market volatilities on Inflation Protected and Ssga International 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 Inflation Protected with a short position of Ssga International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation Protected and Ssga International.
Diversification Opportunities for Inflation Protected and Ssga International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inflation and Ssga is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Protected Bond Fund and Ssga International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga International Stock and Inflation Protected 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 Inflation Protected Bond Fund are associated (or correlated) with Ssga International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga International Stock has no effect on the direction of Inflation Protected i.e., Inflation Protected and Ssga International go up and down completely randomly.
Pair Corralation between Inflation Protected and Ssga International
Assuming the 90 days horizon Inflation Protected is expected to generate 1.51 times less return on investment than Ssga International. But when comparing it to its historical volatility, Inflation Protected Bond Fund is 1.95 times less risky than Ssga International. It trades about 0.19 of its potential returns per unit of risk. Ssga International Stock is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,134 in Ssga International Stock on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Ssga International Stock or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Inflation Protected Bond Fund vs. Ssga International Stock
Performance |
| Timeline |
| Inflation Protected |
| Ssga International Stock |
Inflation Protected and Ssga International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflation Protected and Ssga International
The main advantage of trading using opposite Inflation Protected and Ssga International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflation Protected position performs unexpectedly, Ssga International 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 International will offset losses from the drop in Ssga International's long position.| Inflation Protected vs. Pimco Diversified Income | Inflation Protected vs. Adams Diversified Equity | Inflation Protected vs. Delaware Limited Term Diversified | Inflation Protected vs. Davenport Small Cap |
| Ssga International vs. Schwab E Equity | Ssga International vs. Harding Loevner Emerging | Ssga International vs. Schwab Large Cap Growth | Ssga International vs. Schwab Dividend Equity |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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