Correlation Between SSgA SPDR and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and SPDR Dow 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 SPDR Dow 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 SPDR Dow Jones, you can compare the effects of market volatilities on SSgA SPDR and SPDR Dow 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 SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and SPDR Dow.
Diversification Opportunities for SSgA SPDR and SPDR Dow
Weak diversification
The 3 months correlation between SSgA and SPDR is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones 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 SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and SPDR Dow go up and down completely randomly.
Pair Corralation between SSgA SPDR and SPDR Dow
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 0.97 times more return on investment than SPDR Dow. However, SSgA SPDR ETFs is 1.03 times less risky than SPDR Dow. It trades about -0.26 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about -0.3 per unit of risk. If you would invest 4,228 in SSgA SPDR ETFs on December 4, 2024 and sell it today you would lose (230.00) from holding SSgA SPDR ETFs or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. SPDR Dow Jones
Performance |
| Timeline |
| SSgA SPDR ETFs |
| SPDR Dow Jones |
SSgA SPDR and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and SPDR Dow
The main advantage of trading using opposite SSgA SPDR and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow'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 |
| SPDR Dow vs. SPDR MSCI World | SPDR Dow vs. SPDR SP Dividend | SPDR Dow vs. SPDR SP 500 | SPDR Dow vs. SPDR BB SB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |