Correlation Between SSGA Active and Morningstar Unconstrained
Can any of the company-specific risk be diversified away by investing in both SSGA Active and Morningstar Unconstrained 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 Morningstar Unconstrained 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 Morningstar Unconstrained Allocation, you can compare the effects of market volatilities on SSGA Active and Morningstar Unconstrained 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 Morningstar Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and Morningstar Unconstrained.
Diversification Opportunities for SSGA Active and Morningstar Unconstrained
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between SSGA and Morningstar is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and Morningstar Unconstrained Allo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Unconstrained 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 Morningstar Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Unconstrained has no effect on the direction of SSGA Active i.e., SSGA Active and Morningstar Unconstrained go up and down completely randomly.
Pair Corralation between SSGA Active and Morningstar Unconstrained
Given the investment horizon of 90 days SSGA Active is expected to generate 2.09 times less return on investment than Morningstar Unconstrained. But when comparing it to its historical volatility, SSGA Active Trust is 2.67 times less risky than Morningstar Unconstrained. It trades about 0.1 of its potential returns per unit of risk. Morningstar Unconstrained Allocation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 918.00 in Morningstar Unconstrained Allocation on September 2, 2024 and sell it today you would earn a total of 277.00 from holding Morningstar Unconstrained Allocation or generate 30.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. Morningstar Unconstrained Allo
Performance |
| Timeline |
| SSGA Active Trust |
| Morningstar Unconstrained |
SSGA Active and Morningstar Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and Morningstar Unconstrained
The main advantage of trading using opposite SSGA Active and Morningstar Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, Morningstar Unconstrained 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 Morningstar Unconstrained will offset losses from the drop in Morningstar Unconstrained'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 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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