Correlation Between SPDR SSgA and WisdomTree Managed
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA and WisdomTree Managed 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 WisdomTree Managed 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 WisdomTree Managed Futures, you can compare the effects of market volatilities on SPDR SSgA and WisdomTree Managed 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 WisdomTree Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and WisdomTree Managed.
Diversification Opportunities for SPDR SSgA and WisdomTree Managed
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and WisdomTree is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Multi Asset and WisdomTree Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Managed 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 WisdomTree Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Managed has no effect on the direction of SPDR SSgA i.e., SPDR SSgA and WisdomTree Managed go up and down completely randomly.
Pair Corralation between SPDR SSgA and WisdomTree Managed
Considering the 90-day investment horizon SPDR SSgA Multi Asset is expected to generate 0.84 times more return on investment than WisdomTree Managed. However, SPDR SSgA Multi Asset is 1.19 times less risky than WisdomTree Managed. It trades about 0.05 of its potential returns per unit of risk. WisdomTree Managed Futures is currently generating about 0.04 per unit of risk. If you would invest 2,725 in SPDR SSgA Multi Asset on September 12, 2024 and sell it today you would earn a total of 110.41 from holding SPDR SSgA Multi Asset or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSgA Multi Asset vs. WisdomTree Managed Futures
Performance |
| Timeline |
| SPDR SSgA Multi |
| WisdomTree Managed |
SPDR SSgA and WisdomTree Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and WisdomTree Managed
The main advantage of trading using opposite SPDR SSgA and WisdomTree Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA position performs unexpectedly, WisdomTree Managed 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 WisdomTree Managed will offset losses from the drop in WisdomTree Managed'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 |
| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP | WisdomTree Managed vs. SPDR SSgA Multi Asset |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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