Correlation Between Xtrackers Short and SSGA Active
Can any of the company-specific risk be diversified away by investing in both Xtrackers Short and SSGA Active 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 Xtrackers Short and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Short Duration and SSGA Active Trust, you can compare the effects of market volatilities on Xtrackers Short and SSGA Active 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 Xtrackers Short with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Short and SSGA Active.
Diversification Opportunities for Xtrackers Short and SSGA Active
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and SSGA is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Short Duration and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust and Xtrackers Short 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 Xtrackers Short Duration are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of Xtrackers Short i.e., Xtrackers Short and SSGA Active go up and down completely randomly.
Pair Corralation between Xtrackers Short and SSGA Active
Given the investment horizon of 90 days Xtrackers Short Duration is expected to generate 1.62 times more return on investment than SSGA Active. However, Xtrackers Short is 1.62 times more volatile than SSGA Active Trust. It trades about 0.34 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.5 per unit of risk. If you would invest 4,486 in Xtrackers Short Duration on September 1, 2024 and sell it today you would earn a total of 61.00 from holding Xtrackers Short Duration or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers Short Duration vs. SSGA Active Trust
Performance |
| Timeline |
| Xtrackers Short Duration |
| SSGA Active Trust |
Xtrackers Short and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Short and SSGA Active
The main advantage of trading using opposite Xtrackers Short and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Short position performs unexpectedly, SSGA Active 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 SSGA Active will offset losses from the drop in SSGA Active's long position.| Xtrackers Short vs. Xtrackers High Beta | Xtrackers Short vs. Xtrackers Low Beta | Xtrackers Short vs. iShares Edge High | Xtrackers Short vs. PGIM Active High |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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