Correlation Between SPDR MarketAxess and SSGA Active
Can any of the company-specific risk be diversified away by investing in both SPDR MarketAxess and SSGA Active 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 MarketAxess and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MarketAxess Investment and SSGA Active Trust, you can compare the effects of market volatilities on SPDR MarketAxess and SSGA Active 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 MarketAxess with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MarketAxess and SSGA Active.
Diversification Opportunities for SPDR MarketAxess and SSGA Active
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and SSGA is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MarketAxess Investment and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust and SPDR MarketAxess 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 MarketAxess Investment are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of SPDR MarketAxess i.e., SPDR MarketAxess and SSGA Active go up and down completely randomly.
Pair Corralation between SPDR MarketAxess and SSGA Active
Given the investment horizon of 90 days SPDR MarketAxess Investment is expected to generate 2.57 times more return on investment than SSGA Active. However, SPDR MarketAxess is 2.57 times more volatile than SSGA Active Trust. It trades about 0.03 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.07 per unit of risk. If you would invest 9,332 in SPDR MarketAxess Investment on August 29, 2024 and sell it today you would earn a total of 266.00 from holding SPDR MarketAxess Investment or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR MarketAxess Investment vs. SSGA Active Trust
Performance |
| Timeline |
| SPDR MarketAxess Inv |
| SSGA Active Trust |
SPDR MarketAxess and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MarketAxess and SSGA Active
The main advantage of trading using opposite SPDR MarketAxess and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MarketAxess position performs unexpectedly, SSGA Active 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 Active will offset losses from the drop in SSGA Active's long position.| SPDR MarketAxess vs. SSGA Active Trust | SPDR MarketAxess vs. SPDR Series Trust | SPDR MarketAxess vs. SPDR Bloomberg Barclays | SPDR MarketAxess vs. SSGA Active Trust |
| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SSGA Active Trust | SSGA Active 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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