Correlation Between SSGA Active and BlackRock ETF
Can any of the company-specific risk be diversified away by investing in both SSGA Active and BlackRock ETF 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 BlackRock ETF 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 BlackRock ETF Trust, you can compare the effects of market volatilities on SSGA Active and BlackRock ETF 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 BlackRock ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and BlackRock ETF.
Diversification Opportunities for SSGA Active and BlackRock ETF
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SSGA and BlackRock is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and BlackRock ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ETF Trust 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 BlackRock ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ETF Trust has no effect on the direction of SSGA Active i.e., SSGA Active and BlackRock ETF go up and down completely randomly.
Pair Corralation between SSGA Active and BlackRock ETF
Given the investment horizon of 90 days SSGA Active Trust is expected to generate 1.32 times more return on investment than BlackRock ETF. However, SSGA Active is 1.32 times more volatile than BlackRock ETF Trust. It trades about 0.14 of its potential returns per unit of risk. BlackRock ETF Trust is currently generating about 0.17 per unit of risk. If you would invest 2,418 in SSGA Active Trust on September 2, 2024 and sell it today you would earn a total of 203.00 from holding SSGA Active Trust or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. BlackRock ETF Trust
Performance |
| Timeline |
| SSGA Active Trust |
| BlackRock ETF Trust |
SSGA Active and BlackRock ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and BlackRock ETF
The main advantage of trading using opposite SSGA Active and BlackRock ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, BlackRock ETF 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 BlackRock ETF will offset losses from the drop in BlackRock ETF's long position.| SSGA Active vs. SPDR Bloomberg Barclays | SSGA Active vs. SPDR SSGA Fixed | SSGA Active vs. SPDR DoubleLine Short | SSGA Active vs. SPDR Portfolio Corporate |
| BlackRock ETF vs. BlackRock High Yield | BlackRock ETF vs. Hartford Short Duration | BlackRock ETF vs. SSGA Active Trust | BlackRock ETF vs. Aquagold International |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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