Correlation Between Schwab Small-cap and Ssga International
Can any of the company-specific risk be diversified away by investing in both Schwab Small-cap and Ssga International 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 Schwab Small-cap and Ssga International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwab Small Cap Equity and Ssga International Stock, you can compare the effects of market volatilities on Schwab Small-cap and Ssga International 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 Schwab Small-cap with a short position of Ssga International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwab Small-cap and Ssga International.
Diversification Opportunities for Schwab Small-cap and Ssga International
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Schwab and Ssga is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Small Cap Equity and Ssga International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga International Stock and Schwab Small-cap 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 Schwab Small Cap Equity are associated (or correlated) with Ssga International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga International Stock has no effect on the direction of Schwab Small-cap i.e., Schwab Small-cap and Ssga International go up and down completely randomly.
Pair Corralation between Schwab Small-cap and Ssga International
Assuming the 90 days horizon Schwab Small-cap is expected to generate 2.19 times less return on investment than Ssga International. In addition to that, Schwab Small-cap is 1.68 times more volatile than Ssga International Stock. It trades about 0.02 of its total potential returns per unit of risk. Ssga International Stock is currently generating about 0.07 per unit of volatility. If you would invest 920.00 in Ssga International Stock on November 28, 2024 and sell it today you would earn a total of 256.00 from holding Ssga International Stock or generate 27.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schwab Small Cap Equity vs. Ssga International Stock
Performance |
| Timeline |
| Schwab Small Cap |
| Ssga International Stock |
Schwab Small-cap and Ssga International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schwab Small-cap and Ssga International
The main advantage of trading using opposite Schwab Small-cap and Ssga International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwab Small-cap position performs unexpectedly, Ssga International 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 International will offset losses from the drop in Ssga International's long position.| Schwab Small-cap vs. Goldman Sachs High | Schwab Small-cap vs. Mesirow Financial High | Schwab Small-cap vs. Alpine High Yield | Schwab Small-cap vs. Aqr Alternative Risk |
| 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 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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