Correlation Between SSGA Active and FolioBeyond Rising
Can any of the company-specific risk be diversified away by investing in both SSGA Active and FolioBeyond Rising 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 FolioBeyond Rising 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 FolioBeyond Rising Rates, you can compare the effects of market volatilities on SSGA Active and FolioBeyond Rising 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 FolioBeyond Rising. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and FolioBeyond Rising.
Diversification Opportunities for SSGA Active and FolioBeyond Rising
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SSGA and FolioBeyond is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and FolioBeyond Rising Rates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FolioBeyond Rising Rates 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 FolioBeyond Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FolioBeyond Rising Rates has no effect on the direction of SSGA Active i.e., SSGA Active and FolioBeyond Rising go up and down completely randomly.
Pair Corralation between SSGA Active and FolioBeyond Rising
Given the investment horizon of 90 days SSGA Active is expected to generate 1.47 times less return on investment than FolioBeyond Rising. But when comparing it to its historical volatility, SSGA Active Trust is 2.45 times less risky than FolioBeyond Rising. It trades about 0.13 of its potential returns per unit of risk. FolioBeyond Rising Rates is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,030 in FolioBeyond Rising Rates on August 29, 2024 and sell it today you would earn a total of 509.00 from holding FolioBeyond Rising Rates or generate 16.8% 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. FolioBeyond Rising Rates
Performance |
| Timeline |
| SSGA Active Trust |
| FolioBeyond Rising Rates |
SSGA Active and FolioBeyond Rising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and FolioBeyond Rising
The main advantage of trading using opposite SSGA Active and FolioBeyond Rising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, FolioBeyond Rising 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 FolioBeyond Rising will offset losses from the drop in FolioBeyond Rising's long position.| SSGA Active vs. WisdomTree Interest Rate | SSGA Active vs. WisdomTree SmallCap Quality | SSGA Active vs. WisdomTree Emerging Markets | SSGA Active vs. WisdomTree Emerging Markets |
| FolioBeyond Rising vs. WisdomTree Interest Rate | FolioBeyond Rising vs. WisdomTree SmallCap Quality | FolioBeyond Rising vs. WisdomTree Emerging Markets | FolioBeyond Rising vs. WisdomTree Emerging Markets |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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