Correlation Between X Square and SSGA Active
Can any of the company-specific risk be diversified away by investing in both X Square 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 X Square and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Square Balanced and SSGA Active Trust, you can compare the effects of market volatilities on X Square 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 X Square with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Square and SSGA Active.
Diversification Opportunities for X Square and SSGA Active
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SQCBX and SSGA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding X Square Balanced 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 X Square 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 X Square Balanced 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 X Square i.e., X Square and SSGA Active go up and down completely randomly.
Pair Corralation between X Square and SSGA Active
Assuming the 90 days horizon X Square Balanced is expected to generate 2.54 times more return on investment than SSGA Active. However, X Square is 2.54 times more volatile than SSGA Active Trust. It trades about 0.19 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.07 per unit of risk. If you would invest 1,319 in X Square Balanced on November 4, 2024 and sell it today you would earn a total of 29.00 from holding X Square Balanced or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Square Balanced vs. SSGA Active Trust
Performance |
| Timeline |
| X Square Balanced |
| SSGA Active Trust |
X Square and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Square and SSGA Active
The main advantage of trading using opposite X Square and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Square 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.| X Square vs. X Square Balanced | X Square vs. X Square Balanced | X Square vs. FT Vest Equity | X Square vs. Zillow Group Class |
| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR MarketAxess Investment | SSGA Active 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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