Correlation Between SSGA Active and Starboard Investment
Can any of the company-specific risk be diversified away by investing in both SSGA Active and Starboard Investment 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 SSGA Active and Starboard Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSGA Active Trust and Starboard Investment Trust, you can compare the effects of market volatilities on SSGA Active and Starboard Investment 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 SSGA Active with a short position of Starboard Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and Starboard Investment.
Diversification Opportunities for SSGA Active and Starboard Investment
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SSGA and Starboard is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and Starboard Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starboard Investment and SSGA 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 SSGA Active Trust are associated (or correlated) with Starboard Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starboard Investment has no effect on the direction of SSGA Active i.e., SSGA Active and Starboard Investment go up and down completely randomly.
Pair Corralation between SSGA Active and Starboard Investment
Given the investment horizon of 90 days SSGA Active Trust is expected to generate 0.5 times more return on investment than Starboard Investment. However, SSGA Active Trust is 2.0 times less risky than Starboard Investment. It trades about -0.03 of its potential returns per unit of risk. Starboard Investment Trust is currently generating about -0.04 per unit of risk. If you would invest 2,621 in SSGA Active Trust on August 30, 2024 and sell it today you would lose (7.00) from holding SSGA Active Trust or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. Starboard Investment Trust
Performance |
| Timeline |
| SSGA Active Trust |
| Starboard Investment |
SSGA Active and Starboard Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and Starboard Investment
The main advantage of trading using opposite SSGA Active and Starboard Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, Starboard Investment 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 Starboard Investment will offset losses from the drop in Starboard Investment's long position.| SSGA Active vs. WisdomTree Interest Rate | SSGA Active vs. WisdomTree SmallCap Quality | SSGA Active vs. WisdomTree Emerging Markets | SSGA Active vs. WisdomTree Emerging Markets |
| Starboard Investment vs. Adaptive Alpha Opportunities | Starboard Investment vs. Anfield Dynamic Fixed | Starboard Investment vs. American Century ETF | Starboard Investment vs. Dimensional ETF 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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