Correlation Between SPDR Portfolio and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio 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 SPDR Portfolio and SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Aggregate and SPDR SSGA Fixed, you can compare the effects of market volatilities on SPDR Portfolio 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 SPDR Portfolio with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and SPDR SSGA.
Diversification Opportunities for SPDR Portfolio and SPDR SSGA
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and SPDR is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Aggregate and SPDR SSGA Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Fixed and SPDR Portfolio 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 Portfolio Aggregate 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 Fixed has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and SPDR SSGA go up and down completely randomly.
Pair Corralation between SPDR Portfolio and SPDR SSGA
Given the investment horizon of 90 days SPDR Portfolio Aggregate is expected to generate 0.93 times more return on investment than SPDR SSGA. However, SPDR Portfolio Aggregate is 1.07 times less risky than SPDR SSGA. It trades about 0.07 of its potential returns per unit of risk. SPDR SSGA Fixed is currently generating about 0.05 per unit of risk. If you would invest 2,535 in SPDR Portfolio Aggregate on August 30, 2024 and sell it today you would earn a total of 15.00 from holding SPDR Portfolio Aggregate or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Aggregate vs. SPDR SSGA Fixed
Performance |
| Timeline |
| SPDR Portfolio Aggregate |
| SPDR SSGA Fixed |
SPDR Portfolio and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and SPDR SSGA
The main advantage of trading using opposite SPDR Portfolio and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio 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.| SPDR Portfolio vs. SPDR SP World | SPDR Portfolio vs. SPDR Barclays Intermediate | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio Emerging |
| SPDR SSGA vs. SPDR SSGA Sector | SPDR SSGA vs. SPDR DoubleLine Emerging | SPDR SSGA vs. SPDR DoubleLine Short | SPDR SSGA vs. SPDR SSgA Ultra |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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