Correlation Between SSGA Active and IShares Short
Can any of the company-specific risk be diversified away by investing in both SSGA Active and IShares Short 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 IShares Short 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 iShares Short Maturity, you can compare the effects of market volatilities on SSGA Active and IShares Short 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 IShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and IShares Short.
Diversification Opportunities for SSGA Active and IShares Short
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SSGA and IShares is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and iShares Short Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Short Maturity 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 IShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Short Maturity has no effect on the direction of SSGA Active i.e., SSGA Active and IShares Short go up and down completely randomly.
Pair Corralation between SSGA Active and IShares Short
Given the investment horizon of 90 days SSGA Active Trust is expected to generate 2.66 times more return on investment than IShares Short. However, SSGA Active is 2.66 times more volatile than iShares Short Maturity. It trades about 0.18 of its potential returns per unit of risk. iShares Short Maturity is currently generating about 0.23 per unit of risk. If you would invest 2,961 in SSGA Active Trust on August 29, 2024 and sell it today you would earn a total of 29.00 from holding SSGA Active Trust or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. iShares Short Maturity
Performance |
| Timeline |
| SSGA Active Trust |
| iShares Short Maturity |
SSGA Active and IShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and IShares Short
The main advantage of trading using opposite SSGA Active and IShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, IShares Short 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 IShares Short will offset losses from the drop in IShares Short's long position.| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR Nuveen Municipal |
| IShares Short vs. iShares Interest Rate | IShares Short vs. ABIVAX Socit Anonyme | IShares Short vs. HUMANA INC | IShares Short vs. SCOR PK |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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