Correlation Between SSGA Active and WisdomTree Interest
Can any of the company-specific risk be diversified away by investing in both SSGA Active and WisdomTree Interest 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 WisdomTree Interest 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 WisdomTree Interest Rate, you can compare the effects of market volatilities on SSGA Active and WisdomTree Interest 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 WisdomTree Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and WisdomTree Interest.
Diversification Opportunities for SSGA Active and WisdomTree Interest
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SSGA and WisdomTree is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and WisdomTree Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Interest Rate 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 WisdomTree Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Interest Rate has no effect on the direction of SSGA Active i.e., SSGA Active and WisdomTree Interest go up and down completely randomly.
Pair Corralation between SSGA Active and WisdomTree Interest
Given the investment horizon of 90 days SSGA Active is expected to generate 1.39 times less return on investment than WisdomTree Interest. But when comparing it to its historical volatility, SSGA Active Trust is 1.12 times less risky than WisdomTree Interest. It trades about 0.13 of its potential returns per unit of risk. WisdomTree Interest Rate is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,897 in WisdomTree Interest Rate on September 2, 2024 and sell it today you would earn a total of 348.00 from holding WisdomTree Interest Rate or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. WisdomTree Interest Rate
Performance |
| Timeline |
| SSGA Active Trust |
| WisdomTree Interest Rate |
SSGA Active and WisdomTree Interest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and WisdomTree Interest
The main advantage of trading using opposite SSGA Active and WisdomTree Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, WisdomTree Interest 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 WisdomTree Interest will offset losses from the drop in WisdomTree Interest'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 |
| WisdomTree Interest vs. WisdomTree Interest Rate | WisdomTree Interest vs. First Trust Tactical | WisdomTree Interest vs. WisdomTree Emerging Markets | WisdomTree Interest vs. WisdomTree SmallCap Quality |
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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