Correlation Between SSGA Active and PIMCO ETF
Can any of the company-specific risk be diversified away by investing in both SSGA Active and PIMCO 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 PIMCO 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 PIMCO ETF Trust, you can compare the effects of market volatilities on SSGA Active and PIMCO 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 PIMCO ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and PIMCO ETF.
Diversification Opportunities for SSGA Active and PIMCO ETF
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SSGA and PIMCO is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and PIMCO ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO 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 PIMCO ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO ETF Trust has no effect on the direction of SSGA Active i.e., SSGA Active and PIMCO ETF go up and down completely randomly.
Pair Corralation between SSGA Active and PIMCO ETF
Given the investment horizon of 90 days SSGA Active is expected to generate 61.0 times less return on investment than PIMCO ETF. But when comparing it to its historical volatility, SSGA Active Trust is 1.65 times less risky than PIMCO ETF. It trades about 0.0 of its potential returns per unit of risk. PIMCO ETF Trust is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,544 in PIMCO ETF Trust on August 27, 2024 and sell it today you would earn a total of 11.00 from holding PIMCO ETF Trust or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. PIMCO ETF Trust
Performance |
| Timeline |
| SSGA Active Trust |
| PIMCO ETF Trust |
SSGA Active and PIMCO ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and PIMCO ETF
The main advantage of trading using opposite SSGA Active and PIMCO ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, PIMCO 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 PIMCO ETF will offset losses from the drop in PIMCO 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 |
| PIMCO ETF vs. SSGA Active Trust | PIMCO ETF vs. SPDR MarketAxess Investment | PIMCO ETF vs. SSGA Active 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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