Correlation Between SSGA Active and Mairs Power
Can any of the company-specific risk be diversified away by investing in both SSGA Active and Mairs Power 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 Mairs Power 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 Mairs Power Minnesota, you can compare the effects of market volatilities on SSGA Active and Mairs Power 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 Mairs Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and Mairs Power.
Diversification Opportunities for SSGA Active and Mairs Power
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SSGA and Mairs is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and Mairs Power Minnesota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mairs Power Minnesota 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 Mairs Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mairs Power Minnesota has no effect on the direction of SSGA Active i.e., SSGA Active and Mairs Power go up and down completely randomly.
Pair Corralation between SSGA Active and Mairs Power
Given the investment horizon of 90 days SSGA Active is expected to generate 1.16 times less return on investment than Mairs Power. But when comparing it to its historical volatility, SSGA Active Trust is 1.21 times less risky than Mairs Power. It trades about 0.18 of its potential returns per unit of risk. Mairs Power Minnesota is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,210 in Mairs Power Minnesota on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Mairs Power Minnesota or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. Mairs Power Minnesota
Performance |
| Timeline |
| SSGA Active Trust |
| Mairs Power Minnesota |
SSGA Active and Mairs Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and Mairs Power
The main advantage of trading using opposite SSGA Active and Mairs Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, Mairs Power 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 Mairs Power will offset losses from the drop in Mairs Power'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 |
| Mairs Power vs. BlackRock Intermediate Muni | Mairs Power vs. IQ MacKay Municipal | Mairs Power vs. Overlay Shares Municipal | Mairs Power vs. IQ MacKay 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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