Correlation Between Ssga International and Scout Small
Can any of the company-specific risk be diversified away by investing in both Ssga International and Scout Small 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 Scout Small 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 Scout Small Cap, you can compare the effects of market volatilities on Ssga International and Scout Small 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 Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssga International and Scout Small.
Diversification Opportunities for Ssga International and Scout Small
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ssga and Scout is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ssga International Stock and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Small Cap 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 Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Ssga International i.e., Ssga International and Scout Small go up and down completely randomly.
Pair Corralation between Ssga International and Scout Small
Assuming the 90 days horizon Ssga International is expected to generate 2.79 times less return on investment than Scout Small. But when comparing it to its historical volatility, Ssga International Stock is 1.64 times less risky than Scout Small. It trades about 0.07 of its potential returns per unit of risk. Scout Small Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,435 in Scout Small Cap on August 26, 2024 and sell it today you would earn a total of 1,005 from holding Scout Small Cap or generate 41.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssga International Stock vs. Scout Small Cap
Performance |
| Timeline |
| Ssga International Stock |
| Scout Small Cap |
Ssga International and Scout Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssga International and Scout Small
The main advantage of trading using opposite Ssga International and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssga International position performs unexpectedly, Scout Small 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 Scout Small will offset losses from the drop in Scout Small'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 |
| Scout Small vs. Schwab Treasury Inflation | Scout Small vs. Ab Bond Inflation | Scout Small vs. Atac Inflation Rotation | Scout Small vs. Aqr Managed Futures |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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