Correlation Between SSGA Active and FundX Investment
Can any of the company-specific risk be diversified away by investing in both SSGA Active and FundX Investment 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 FundX Investment 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 FundX Investment Trust, you can compare the effects of market volatilities on SSGA Active and FundX Investment 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 FundX Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA Active and FundX Investment.
Diversification Opportunities for SSGA Active and FundX Investment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SSGA and FundX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SSGA Active Trust and FundX Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Investment 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 FundX Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Investment Trust has no effect on the direction of SSGA Active i.e., SSGA Active and FundX Investment go up and down completely randomly.
Pair Corralation between SSGA Active and FundX Investment
Given the investment horizon of 90 days SSGA Active Trust is expected to generate 0.87 times more return on investment than FundX Investment. However, SSGA Active Trust is 1.15 times less risky than FundX Investment. It trades about 0.12 of its potential returns per unit of risk. FundX Investment Trust is currently generating about 0.1 per unit of risk. If you would invest 2,462 in SSGA Active Trust on September 3, 2024 and sell it today you would earn a total of 159.00 from holding SSGA Active Trust or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSGA Active Trust vs. FundX Investment Trust
Performance |
| Timeline |
| SSGA Active Trust |
| FundX Investment Trust |
SSGA Active and FundX Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSGA Active and FundX Investment
The main advantage of trading using opposite SSGA Active and FundX Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSGA Active position performs unexpectedly, FundX Investment 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 FundX Investment will offset losses from the drop in FundX Investment'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 |
| FundX Investment vs. First Trust Multi Asset | FundX Investment vs. Collaborative Investment Series | FundX Investment vs. EA Series Trust | FundX Investment vs. Ocean Park International |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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