Correlation Between Managed Account and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both Managed Account and SPDR Galaxy 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 Managed Account and SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Managed Account Series and SPDR Galaxy Hedged, you can compare the effects of market volatilities on Managed Account and SPDR Galaxy 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 Managed Account with a short position of SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Managed Account and SPDR Galaxy.
Diversification Opportunities for Managed Account and SPDR Galaxy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Managed and SPDR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Managed Account Series and SPDR Galaxy Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Hedged and Managed Account 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 Managed Account Series are associated (or correlated) with SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Hedged has no effect on the direction of Managed Account i.e., Managed Account and SPDR Galaxy go up and down completely randomly.
Pair Corralation between Managed Account and SPDR Galaxy
Assuming the 90 days horizon Managed Account is expected to generate 33.74 times less return on investment than SPDR Galaxy. But when comparing it to its historical volatility, Managed Account Series is 8.21 times less risky than SPDR Galaxy. It trades about 0.06 of its potential returns per unit of risk. SPDR Galaxy Hedged is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,525 in SPDR Galaxy Hedged on September 3, 2024 and sell it today you would earn a total of 1,287 from holding SPDR Galaxy Hedged or generate 50.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 11.92% |
| Values | Daily Returns |
Managed Account Series vs. SPDR Galaxy Hedged
Performance |
| Timeline |
| Managed Account Series |
| SPDR Galaxy Hedged |
Managed Account and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Managed Account and SPDR Galaxy
The main advantage of trading using opposite Managed Account and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Managed Account position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| Managed Account vs. Dreyfus Natural Resources | Managed Account vs. Fidelity Advisor Energy | Managed Account vs. Goehring Rozencwajg Resources | Managed Account vs. Gmo Resources |
| SPDR Galaxy vs. Managed Account Series | SPDR Galaxy vs. Fidelity Sai International | SPDR Galaxy vs. Schwab Strategic Trust | SPDR Galaxy vs. Inpex Corp ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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