Correlation Between SPDR SSgA and Arrow ETF
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA and Arrow ETF 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 SPDR SSgA and Arrow ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSgA Multi Asset and Arrow ETF Trust, you can compare the effects of market volatilities on SPDR SSgA and Arrow ETF 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 SPDR SSgA with a short position of Arrow ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and Arrow ETF.
Diversification Opportunities for SPDR SSgA and Arrow ETF
Very weak diversification
The 3 months correlation between SPDR and Arrow is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Multi Asset and Arrow ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow ETF Trust and SPDR SSgA 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 SPDR SSgA Multi Asset are associated (or correlated) with Arrow ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow ETF Trust has no effect on the direction of SPDR SSgA i.e., SPDR SSgA and Arrow ETF go up and down completely randomly.
Pair Corralation between SPDR SSgA and Arrow ETF
Considering the 90-day investment horizon SPDR SSgA Multi Asset is expected to generate 0.98 times more return on investment than Arrow ETF. However, SPDR SSgA Multi Asset is 1.02 times less risky than Arrow ETF. It trades about 0.08 of its potential returns per unit of risk. Arrow ETF Trust is currently generating about 0.08 per unit of risk. If you would invest 2,620 in SPDR SSgA Multi Asset on September 1, 2024 and sell it today you would earn a total of 258.00 from holding SPDR SSgA Multi Asset or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
SPDR SSgA Multi Asset vs. Arrow ETF Trust
Performance |
| Timeline |
| SPDR SSgA Multi |
| Arrow ETF Trust |
SPDR SSgA and Arrow ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and Arrow ETF
The main advantage of trading using opposite SPDR SSgA and Arrow ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA position performs unexpectedly, Arrow ETF 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 Arrow ETF will offset losses from the drop in Arrow ETF's long position.| SPDR SSgA vs. SPDR SSgA Global | SPDR SSgA vs. SPDR SSgA Income | SPDR SSgA vs. VanEck Inflation Allocation | SPDR SSgA vs. SPDR MSCI EAFE |
| Arrow ETF vs. iShares Morningstar Multi Asset | Arrow ETF vs. Amplify High Income | Arrow ETF vs. First Trust Multi Asset | Arrow ETF vs. SPDR SSgA Income |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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