Correlation Between SSGA Active and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both SSGA Active and VanEck Vectors 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 SSGA Active and VanEck Vectors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSGA Active Trust and VanEck Vectors Moodys, you can compare the effects of market volatilities on SSGA Active and VanEck Vectors 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 SSGA Active with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and VanEck Vectors.
Diversification Opportunities for SSGA Active and VanEck Vectors
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SSGA and VanEck is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and VanEck Vectors Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors Moodys and SSGA Active 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 SSGA Active Trust are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors Moodys has no effect on the direction of SSGA Active i.e., SSGA Active and VanEck Vectors go up and down completely randomly.
Pair Corralation between SSGA Active and VanEck Vectors
Given the investment horizon of 90 days SSGA Active is expected to generate 1.79 times less return on investment than VanEck Vectors. But when comparing it to its historical volatility, SSGA Active Trust is 2.01 times less risky than VanEck Vectors. It trades about 0.09 of its potential returns per unit of risk. VanEck Vectors Moodys is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,934 in VanEck Vectors Moodys on August 26, 2024 and sell it today you would earn a total of 209.00 from holding VanEck Vectors Moodys or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. VanEck Vectors Moodys
Performance |
| Timeline |
| SSGA Active Trust |
| VanEck Vectors Moodys |
SSGA Active and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and VanEck Vectors
The main advantage of trading using opposite SSGA Active and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, VanEck Vectors 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 VanEck Vectors will offset losses from the drop in VanEck Vectors' long position.| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR MarketAxess Investment | SSGA Active vs. SSGA Active Trust |
| VanEck Vectors vs. Senstar Technologies | VanEck Vectors vs. ImmuCell | VanEck Vectors vs. Anika Therapeutics | VanEck Vectors vs. Aquagold International |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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