Correlation Between Northern Lights and SSGA Active
Can any of the company-specific risk be diversified away by investing in both Northern Lights 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 Northern Lights and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Lights and SSGA Active Trust, you can compare the effects of market volatilities on Northern Lights 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 Northern Lights with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Lights and SSGA Active.
Diversification Opportunities for Northern Lights and SSGA Active
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Northern and SSGA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Northern Lights 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 Northern Lights 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 Northern Lights 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 Northern Lights i.e., Northern Lights and SSGA Active go up and down completely randomly.
Pair Corralation between Northern Lights and SSGA Active
Given the investment horizon of 90 days Northern Lights is expected to generate 4.08 times more return on investment than SSGA Active. However, Northern Lights is 4.08 times more volatile than SSGA Active Trust. It trades about 0.11 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.09 per unit of risk. If you would invest 2,717 in Northern Lights on August 26, 2024 and sell it today you would earn a total of 846.00 from holding Northern Lights or generate 31.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Lights vs. SSGA Active Trust
Performance |
| Timeline |
| Northern Lights |
| SSGA Active Trust |
Northern Lights and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Lights and SSGA Active
The main advantage of trading using opposite Northern Lights and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Lights 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.| Northern Lights vs. Sterling Capital Focus | Northern Lights vs. Roundhill ETF Trust | Northern Lights vs. Northern Lights | Northern Lights vs. First Trust Exchange Traded |
| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR MarketAxess Investment | SSGA Active 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.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |