Correlation Between SPDR SSGA and Vanguard ESG
Can any of the company-specific risk be diversified away by investing in both SPDR SSGA and Vanguard ESG 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 SSGA and Vanguard ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSGA My2026 and Vanguard ESG Corporate, you can compare the effects of market volatilities on SPDR SSGA and Vanguard ESG 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 SSGA with a short position of Vanguard ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and Vanguard ESG.
Diversification Opportunities for SPDR SSGA and Vanguard ESG
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and Vanguard is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA My2026 and Vanguard ESG Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard ESG Corporate and SPDR SSGA 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 SSGA My2026 are associated (or correlated) with Vanguard ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard ESG Corporate has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and Vanguard ESG go up and down completely randomly.
Pair Corralation between SPDR SSGA and Vanguard ESG
Given the investment horizon of 90 days SPDR SSGA My2026 is expected to generate 0.16 times more return on investment than Vanguard ESG. However, SPDR SSGA My2026 is 6.15 times less risky than Vanguard ESG. It trades about 0.36 of its potential returns per unit of risk. Vanguard ESG Corporate is currently generating about 0.03 per unit of risk. If you would invest 2,472 in SPDR SSGA My2026 on November 1, 2024 and sell it today you would earn a total of 32.00 from holding SPDR SSGA My2026 or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSGA My2026 vs. Vanguard ESG Corporate
Performance |
| Timeline |
| SPDR SSGA My2026 |
| Vanguard ESG Corporate |
SPDR SSGA and Vanguard ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSGA and Vanguard ESG
The main advantage of trading using opposite SPDR SSGA and Vanguard ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSGA position performs unexpectedly, Vanguard ESG 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 Vanguard ESG will offset losses from the drop in Vanguard ESG's long position.| SPDR SSGA vs. iShares iBonds Dec | SPDR SSGA vs. iShares iBonds Dec | SPDR SSGA vs. iShares iBonds Dec | SPDR SSGA vs. iShares iBonds Dec |
| Vanguard ESG vs. Vanguard ESG International | Vanguard ESG vs. Vanguard ESG Stock | Vanguard ESG vs. Vanguard Total Corporate | Vanguard ESG vs. Vanguard Ultra Short Bond |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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