Correlation Between SSgA SPDR and Memscap Regpt
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and Memscap Regpt 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 SPDR and Memscap Regpt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSgA SPDR ETFs and Memscap Regpt, you can compare the effects of market volatilities on SSgA SPDR and Memscap Regpt 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 SPDR with a short position of Memscap Regpt. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and Memscap Regpt.
Diversification Opportunities for SSgA SPDR and Memscap Regpt
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SSgA and Memscap is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Memscap Regpt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Memscap Regpt and SSgA SPDR 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 SPDR ETFs are associated (or correlated) with Memscap Regpt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Memscap Regpt has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Memscap Regpt go up and down completely randomly.
Pair Corralation between SSgA SPDR and Memscap Regpt
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 0.23 times more return on investment than Memscap Regpt. However, SSgA SPDR ETFs is 4.44 times less risky than Memscap Regpt. It trades about -0.03 of its potential returns per unit of risk. Memscap Regpt is currently generating about -0.15 per unit of risk. If you would invest 31,180 in SSgA SPDR ETFs on September 3, 2024 and sell it today you would lose (1,440) from holding SSgA SPDR ETFs or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. Memscap Regpt
Performance |
| Timeline |
| SSgA SPDR ETFs |
| Memscap Regpt |
SSgA SPDR and Memscap Regpt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and Memscap Regpt
The main advantage of trading using opposite SSgA SPDR and Memscap Regpt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, Memscap Regpt 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 Memscap Regpt will offset losses from the drop in Memscap Regpt's long position.| SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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