Correlation Between Ssga International and Schwab Health
Can any of the company-specific risk be diversified away by investing in both Ssga International and Schwab Health 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 Ssga International and Schwab Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssga International Stock and Schwab Health Care, you can compare the effects of market volatilities on Ssga International and Schwab Health 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 Ssga International with a short position of Schwab Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssga International and Schwab Health.
Diversification Opportunities for Ssga International and Schwab Health
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ssga and Schwab is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ssga International Stock and Schwab Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Health Care and Ssga International 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 Ssga International Stock are associated (or correlated) with Schwab Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Health Care has no effect on the direction of Ssga International i.e., Ssga International and Schwab Health go up and down completely randomly.
Pair Corralation between Ssga International and Schwab Health
Assuming the 90 days horizon Ssga International Stock is expected to generate 1.18 times more return on investment than Schwab Health. However, Ssga International is 1.18 times more volatile than Schwab Health Care. It trades about 0.06 of its potential returns per unit of risk. Schwab Health Care is currently generating about 0.04 per unit of risk. If you would invest 971.00 in Ssga International Stock on September 1, 2024 and sell it today you would earn a total of 174.00 from holding Ssga International Stock or generate 17.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Ssga International Stock vs. Schwab Health Care
Performance |
| Timeline |
| Ssga International Stock |
| Schwab Health Care |
Ssga International and Schwab Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssga International and Schwab Health
The main advantage of trading using opposite Ssga International and Schwab Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssga International position performs unexpectedly, Schwab Health 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 Schwab Health will offset losses from the drop in Schwab Health's long position.| Ssga International vs. Schwab E Equity | Ssga International vs. Harding Loevner Emerging | Ssga International vs. Schwab Large Cap Growth | Ssga International vs. Schwab Dividend Equity |
| Schwab Health vs. Nuveen Arizona Municipal | Schwab Health vs. Calamos Short Term Bond | Schwab Health vs. Inflation Protected Bond Fund | Schwab Health vs. Legg Mason Partners |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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