Correlation Between Investment Managers and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both Investment Managers and SPDR SSgA 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 Investment Managers and SPDR SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment Managers Series and SPDR SSgA Multi Asset, you can compare the effects of market volatilities on Investment Managers and SPDR SSgA 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 Investment Managers with a short position of SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Managers and SPDR SSgA.
Diversification Opportunities for Investment Managers and SPDR SSgA
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Investment and SPDR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Investment Managers Series and SPDR SSgA Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Multi and Investment Managers 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 Investment Managers Series are associated (or correlated) with SPDR SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSgA Multi has no effect on the direction of Investment Managers i.e., Investment Managers and SPDR SSgA go up and down completely randomly.
Pair Corralation between Investment Managers and SPDR SSgA
Considering the 90-day investment horizon Investment Managers Series is expected to generate 1.27 times more return on investment than SPDR SSgA. However, Investment Managers is 1.27 times more volatile than SPDR SSgA Multi Asset. It trades about 0.09 of its potential returns per unit of risk. SPDR SSgA Multi Asset is currently generating about 0.06 per unit of risk. If you would invest 1,313 in Investment Managers Series on August 27, 2024 and sell it today you would earn a total of 259.00 from holding Investment Managers Series or generate 19.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investment Managers Series vs. SPDR SSgA Multi Asset
Performance |
| Timeline |
| Investment Managers |
| SPDR SSgA Multi |
Investment Managers and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment Managers and SPDR SSgA
The main advantage of trading using opposite Investment Managers and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment Managers position performs unexpectedly, SPDR SSgA 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 SPDR SSgA will offset losses from the drop in SPDR SSgA's long position.| Investment Managers vs. iShares Core Growth | Investment Managers vs. iShares Core Moderate | Investment Managers vs. iShares Core Conservative | Investment Managers vs. iShares Core Total |
| SPDR SSgA vs. SPDR SSgA Global | SPDR SSgA vs. SPDR SSgA Income | SPDR SSgA vs. VanEck Inflation Allocation | SPDR SSgA vs. SPDR MSCI EAFE |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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