Correlation Between SPDR SP and SSgA
Can any of the company-specific risk be diversified away by investing in both SPDR SP and SSgA 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 SPDR SP and SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 400 and SSgA, you can compare the effects of market volatilities on SPDR SP and SSgA 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 SPDR SP with a short position of SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and SSgA.
Diversification Opportunities for SPDR SP and SSgA
Modest diversification
The 3 months correlation between SPDR and SSgA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 400 and SSgA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA and SPDR SP 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 SPDR SP 400 are associated (or correlated) with SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA has no effect on the direction of SPDR SP i.e., SPDR SP and SSgA go up and down completely randomly.
Pair Corralation between SPDR SP and SSgA
If you would invest 8,806 in SPDR SP 400 on August 30, 2024 and sell it today you would earn a total of 646.00 from holding SPDR SP 400 or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
SPDR SP 400 vs. SSgA
Performance |
| Timeline |
| SPDR SP 400 |
| SSgA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and SSgA
The main advantage of trading using opposite SPDR SP and SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, SSgA 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 SSgA will offset losses from the drop in SSgA's long position.| SPDR SP vs. BlackRock Future Health | SPDR SP vs. Global X Thematic | SPDR SP vs. Aquagold International | SPDR SP vs. Morningstar Unconstrained Allocation |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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