Correlation Between SSGA Active and Zillow Group
Can any of the company-specific risk be diversified away by investing in both SSGA Active and Zillow Group 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 Zillow Group 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 Zillow Group Class, you can compare the effects of market volatilities on SSGA Active and Zillow Group 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 Zillow Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and Zillow Group.
Diversification Opportunities for SSGA Active and Zillow Group
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SSGA and Zillow is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and Zillow Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group Class 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 Zillow Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group Class has no effect on the direction of SSGA Active i.e., SSGA Active and Zillow Group go up and down completely randomly.
Pair Corralation between SSGA Active and Zillow Group
Given the investment horizon of 90 days SSGA Active is expected to generate 10.23 times less return on investment than Zillow Group. But when comparing it to its historical volatility, SSGA Active Trust is 16.9 times less risky than Zillow Group. It trades about 0.09 of its potential returns per unit of risk. Zillow Group Class is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,423 in Zillow Group Class on August 26, 2024 and sell it today you would earn a total of 2,954 from holding Zillow Group Class or generate 54.47% 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. Zillow Group Class
Performance |
| Timeline |
| SSGA Active Trust |
| Zillow Group Class |
SSGA Active and Zillow Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and Zillow Group
The main advantage of trading using opposite SSGA Active and Zillow Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, Zillow Group 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 Zillow Group will offset losses from the drop in Zillow Group'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 |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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