Correlation Between VanEck Inflation and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both VanEck Inflation 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 VanEck Inflation and SPDR SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Inflation Allocation and SPDR SSgA Income, you can compare the effects of market volatilities on VanEck Inflation 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 VanEck Inflation with a short position of SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Inflation and SPDR SSgA.
Diversification Opportunities for VanEck Inflation and SPDR SSgA
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VanEck and SPDR is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Inflation Allocation and SPDR SSgA Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Income and VanEck Inflation 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 VanEck Inflation Allocation 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 Income has no effect on the direction of VanEck Inflation i.e., VanEck Inflation and SPDR SSgA go up and down completely randomly.
Pair Corralation between VanEck Inflation and SPDR SSgA
Given the investment horizon of 90 days VanEck Inflation Allocation is expected to generate 2.01 times more return on investment than SPDR SSgA. However, VanEck Inflation is 2.01 times more volatile than SPDR SSgA Income. It trades about 0.16 of its potential returns per unit of risk. SPDR SSgA Income is currently generating about 0.06 per unit of risk. If you would invest 2,964 in VanEck Inflation Allocation on August 24, 2024 and sell it today you would earn a total of 68.00 from holding VanEck Inflation Allocation or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Inflation Allocation vs. SPDR SSgA Income
Performance |
| Timeline |
| VanEck Inflation All |
| SPDR SSgA Income |
VanEck Inflation and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Inflation and SPDR SSgA
The main advantage of trading using opposite VanEck Inflation and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Inflation 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.| VanEck Inflation vs. iShares Core Growth | VanEck Inflation vs. Alpha Architect Gdsdn | VanEck Inflation vs. ClearShares OCIO ETF | VanEck Inflation vs. Collaborative Investment Series |
| SPDR SSgA vs. First Trust Multi Asset | SPDR SSgA vs. Collaborative Investment Series | SPDR SSgA vs. Akros Monthly Payout | SPDR SSgA vs. Northern Lights |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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