Correlation Between SSGA Active and Vulcan Value
Can any of the company-specific risk be diversified away by investing in both SSGA Active and Vulcan Value 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 Vulcan Value 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 Vulcan Value Partners, you can compare the effects of market volatilities on SSGA Active and Vulcan Value 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 Vulcan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and Vulcan Value.
Diversification Opportunities for SSGA Active and Vulcan Value
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between SSGA and Vulcan is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and Vulcan Value Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Value Partners 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 Vulcan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Value Partners has no effect on the direction of SSGA Active i.e., SSGA Active and Vulcan Value go up and down completely randomly.
Pair Corralation between SSGA Active and Vulcan Value
Given the investment horizon of 90 days SSGA Active is expected to generate 6.71 times less return on investment than Vulcan Value. But when comparing it to its historical volatility, SSGA Active Trust is 5.4 times less risky than Vulcan Value. It trades about 0.08 of its potential returns per unit of risk. Vulcan Value Partners is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,748 in Vulcan Value Partners on September 4, 2024 and sell it today you would earn a total of 1,122 from holding Vulcan Value Partners or generate 64.19% 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. Vulcan Value Partners
Performance |
| Timeline |
| SSGA Active Trust |
| Vulcan Value Partners |
SSGA Active and Vulcan Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and Vulcan Value
The main advantage of trading using opposite SSGA Active and Vulcan Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, Vulcan Value 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 Vulcan Value will offset losses from the drop in Vulcan Value's 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 |
| Vulcan Value vs. Vulcan Value Partners | Vulcan Value vs. FT Vest Equity | Vulcan Value vs. Zillow Group Class | Vulcan Value vs. Northern Lights |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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