Correlation Between IShares Core and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both IShares Core and SSgA SPDR 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 IShares Core and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and SSgA SPDR ETFs, you can compare the effects of market volatilities on IShares Core and SSgA SPDR 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 IShares Core with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SSgA SPDR.
Diversification Opportunities for IShares Core and SSgA SPDR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and SSgA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and IShares Core 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 iShares Core SP are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of IShares Core i.e., IShares Core and SSgA SPDR go up and down completely randomly.
Pair Corralation between IShares Core and SSgA SPDR
Considering the 90-day investment horizon iShares Core SP is expected to generate 0.49 times more return on investment than SSgA SPDR. However, iShares Core SP is 2.03 times less risky than SSgA SPDR. It trades about 0.11 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.05 per unit of risk. If you would invest 39,171 in iShares Core SP on September 3, 2024 and sell it today you would earn a total of 21,336 from holding iShares Core SP or generate 54.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 57.58% |
| Values | Daily Returns |
iShares Core SP vs. SSgA SPDR ETFs
Performance |
| Timeline |
| iShares Core SP |
| SSgA SPDR ETFs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Core and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SSgA SPDR
The main advantage of trading using opposite IShares Core and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SSgA SPDR 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 SPDR will offset losses from the drop in SSgA SPDR's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |