Correlation Between SSGA Active and Global X
Can any of the company-specific risk be diversified away by investing in both SSGA Active and Global X 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 Global X 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 Global X Interest, you can compare the effects of market volatilities on SSGA Active and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and Global X.
Diversification Opportunities for SSGA Active and Global X
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SSGA and Global is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and Global X Interest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Interest 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Interest has no effect on the direction of SSGA Active i.e., SSGA Active and Global X go up and down completely randomly.
Pair Corralation between SSGA Active and Global X
Given the investment horizon of 90 days SSGA Active is expected to generate 603.5 times less return on investment than Global X. But when comparing it to its historical volatility, SSGA Active Trust is 7.3 times less risky than Global X. It trades about 0.0 of its potential returns per unit of risk. Global X Interest is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,946 in Global X Interest on August 23, 2024 and sell it today you would earn a total of 49.00 from holding Global X Interest or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. Global X Interest
Performance |
| Timeline |
| SSGA Active Trust |
| Global X Interest |
SSGA Active and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and Global X
The main advantage of trading using opposite SSGA Active and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| SSGA Active vs. iShares Interest Rate | SSGA Active vs. iShares Interest Rate | SSGA Active vs. WisdomTree Interest Rate |
| Global X vs. Movano Inc | Global X vs. Grayscale Solana Trust | Global X vs. Travelzoo | Global X vs. Sonida Senior Living |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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