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 Corporate and SPDR SSGA Sector, 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
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and SPDR is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Corporate and SPDR SSGA Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Sector 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 Corporate 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 Sector 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 Corporate is expected to under-perform the SPDR SSGA. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Portfolio Corporate is 1.93 times less risky than SPDR SSGA. The etf trades about -0.16 of its potential returns per unit of risk. The SPDR SSGA Sector is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,138 in SPDR SSGA Sector on August 26, 2024 and sell it today you would earn a total of 300.00 from holding SPDR SSGA Sector or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Corporate vs. SPDR SSGA Sector
Performance |
| Timeline |
| SPDR Portfolio Corporate |
| SPDR SSGA Sector |
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. Senstar Technologies | SPDR Portfolio vs. ImmuCell | SPDR Portfolio vs. Anika Therapeutics | SPDR Portfolio vs. Aquagold International |
| SPDR SSGA vs. Morningstar Unconstrained Allocation | SPDR SSGA vs. High Yield Municipal Fund | SPDR SSGA vs. Via Renewables | SPDR SSGA vs. Knife River |
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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