Correlation Between WisdomTree International and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and SPDR 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 WisdomTree International and SPDR SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International Efficient and SPDR SSgA Global, you can compare the effects of market volatilities on WisdomTree International and SPDR 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 WisdomTree International with a short position of SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and SPDR SSgA.
Diversification Opportunities for WisdomTree International and SPDR SSgA
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between WisdomTree and SPDR is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Effic and SPDR SSgA Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Global and WisdomTree International 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 WisdomTree International Efficient are associated (or correlated) with SPDR SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSgA Global has no effect on the direction of WisdomTree International i.e., WisdomTree International and SPDR SSgA go up and down completely randomly.
Pair Corralation between WisdomTree International and SPDR SSgA
Given the investment horizon of 90 days WisdomTree International is expected to generate 1.32 times less return on investment than SPDR SSgA. In addition to that, WisdomTree International is 1.53 times more volatile than SPDR SSgA Global. It trades about 0.04 of its total potential returns per unit of risk. SPDR SSgA Global is currently generating about 0.08 per unit of volatility. If you would invest 3,674 in SPDR SSgA Global on September 3, 2024 and sell it today you would earn a total of 897.00 from holding SPDR SSgA Global or generate 24.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Effic vs. SPDR SSgA Global
Performance |
| Timeline |
| WisdomTree International |
| SPDR SSgA Global |
WisdomTree International and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and SPDR SSgA
The main advantage of trading using opposite WisdomTree International and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, SPDR 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 SPDR SSgA will offset losses from the drop in SPDR SSgA's long position.| WisdomTree International vs. iShares Core Aggressive | WisdomTree International vs. Tidal Trust II | WisdomTree International vs. SPDR SSgA Multi Asset | WisdomTree International vs. SPDR SSgA Global |
| SPDR SSgA vs. SPDR SSgA Income | SPDR SSgA vs. SPDR SSgA Multi Asset | SPDR SSgA vs. SPDR Bloomberg International | SPDR SSgA vs. SPDR Bloomberg Emerging |
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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