Correlation Between SPDR SSgA and ProShares Inflation
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA and ProShares Inflation 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 ProShares Inflation 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 ProShares Inflation Expectations, you can compare the effects of market volatilities on SPDR SSgA and ProShares Inflation 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 ProShares Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and ProShares Inflation.
Diversification Opportunities for SPDR SSgA and ProShares Inflation
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and ProShares is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Multi Asset and ProShares Inflation Expectatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Inflation 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 ProShares Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Inflation has no effect on the direction of SPDR SSgA i.e., SPDR SSgA and ProShares Inflation go up and down completely randomly.
Pair Corralation between SPDR SSgA and ProShares Inflation
Considering the 90-day investment horizon SPDR SSgA is expected to generate 2.05 times less return on investment than ProShares Inflation. But when comparing it to its historical volatility, SPDR SSgA Multi Asset is 1.01 times less risky than ProShares Inflation. It trades about 0.04 of its potential returns per unit of risk. ProShares Inflation Expectations is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,302 in ProShares Inflation Expectations on August 27, 2024 and sell it today you would earn a total of 32.00 from holding ProShares Inflation Expectations or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSgA Multi Asset vs. ProShares Inflation Expectatio
Performance |
| Timeline |
| SPDR SSgA Multi |
| ProShares Inflation |
SPDR SSgA and ProShares Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and ProShares Inflation
The main advantage of trading using opposite SPDR SSgA and ProShares Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA position performs unexpectedly, ProShares Inflation 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 ProShares Inflation will offset losses from the drop in ProShares Inflation's long position.| SPDR SSgA vs. SPDR SSgA Income | SPDR SSgA vs. VanEck Inflation Allocation | SPDR SSgA vs. SPDR MSCI EAFE | SPDR SSgA vs. SPDR MSCI Emerging |
| ProShares Inflation vs. First Trust TCW | ProShares Inflation vs. FolioBeyond Rising Rates | ProShares Inflation vs. SSGA Active Trust |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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