Correlation Between MFS Active and SSGA Active
Can any of the company-specific risk be diversified away by investing in both MFS Active and SSGA Active 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 MFS Active and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Active Exchange and SSGA Active Trust, you can compare the effects of market volatilities on MFS Active and SSGA Active 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 MFS Active with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Active and SSGA Active.
Diversification Opportunities for MFS Active and SSGA Active
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFS and SSGA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MFS Active Exchange and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust and MFS 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 MFS Active Exchange are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of MFS Active i.e., MFS Active and SSGA Active go up and down completely randomly.
Pair Corralation between MFS Active and SSGA Active
Given the investment horizon of 90 days MFS Active Exchange is expected to generate 0.7 times more return on investment than SSGA Active. However, MFS Active Exchange is 1.42 times less risky than SSGA Active. It trades about 0.09 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.03 per unit of risk. If you would invest 2,461 in MFS Active Exchange on October 24, 2024 and sell it today you would earn a total of 6.00 from holding MFS Active Exchange or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Active Exchange vs. SSGA Active Trust
Performance |
| Timeline |
| MFS Active Exchange |
| SSGA Active Trust |
MFS Active and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Active and SSGA Active
The main advantage of trading using opposite MFS Active and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Active position performs unexpectedly, SSGA Active 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 Active will offset losses from the drop in SSGA Active's long position.| MFS Active vs. SSGA Active Trust | MFS Active vs. SPDR Nuveen Municipal | MFS Active vs. iShares Short Maturity | MFS Active vs. First Trust Flexible |
| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR MarketAxess Investment | SSGA Active vs. SSGA Active Trust |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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