Correlation Between Simplify Exchange and SSGA Active
Can any of the company-specific risk be diversified away by investing in both Simplify Exchange 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 Simplify Exchange and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Exchange Traded and SSGA Active Trust, you can compare the effects of market volatilities on Simplify Exchange 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 Simplify Exchange with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and SSGA Active.
Diversification Opportunities for Simplify Exchange and SSGA Active
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Simplify and SSGA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded 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 Simplify Exchange 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 Simplify Exchange Traded 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 Simplify Exchange i.e., Simplify Exchange and SSGA Active go up and down completely randomly.
Pair Corralation between Simplify Exchange and SSGA Active
Considering the 90-day investment horizon Simplify Exchange Traded is expected to generate 3.04 times more return on investment than SSGA Active. However, Simplify Exchange is 3.04 times more volatile than SSGA Active Trust. It trades about 0.11 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.18 per unit of risk. If you would invest 2,496 in Simplify Exchange Traded on August 29, 2024 and sell it today you would earn a total of 44.00 from holding Simplify Exchange Traded or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Exchange Traded vs. SSGA Active Trust
Performance |
| Timeline |
| Simplify Exchange Traded |
| SSGA Active Trust |
Simplify Exchange and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Exchange and SSGA Active
The main advantage of trading using opposite Simplify Exchange and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Exchange 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.| Simplify Exchange vs. Xtrackers California Municipal | Simplify Exchange vs. IQ MacKay Municipal | Simplify Exchange vs. IQ MacKay Municipal | Simplify Exchange vs. ALPS Intermediate Municipal |
| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR Nuveen Municipal |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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