Correlation Between SSgA SPDR and IShares AEX
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and IShares AEX 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 IShares AEX 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 iShares AEX UCITS, you can compare the effects of market volatilities on SSgA SPDR and IShares AEX 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 IShares AEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and IShares AEX.
Diversification Opportunities for SSgA SPDR and IShares AEX
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SSgA and IShares is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and iShares AEX UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares AEX UCITS 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 IShares AEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares AEX UCITS has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and IShares AEX go up and down completely randomly.
Pair Corralation between SSgA SPDR and IShares AEX
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 1.71 times more return on investment than IShares AEX. However, SSgA SPDR is 1.71 times more volatile than iShares AEX UCITS. It trades about 0.18 of its potential returns per unit of risk. iShares AEX UCITS is currently generating about -0.07 per unit of risk. If you would invest 4,980 in SSgA SPDR ETFs on September 13, 2024 and sell it today you would earn a total of 534.00 from holding SSgA SPDR ETFs or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. iShares AEX UCITS
Performance |
| Timeline |
| SSgA SPDR ETFs |
| iShares AEX UCITS |
SSgA SPDR and IShares AEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and IShares AEX
The main advantage of trading using opposite SSgA SPDR and IShares AEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, IShares AEX 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 IShares AEX will offset losses from the drop in IShares AEX'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 |
| IShares AEX vs. Vanguard SP 500 | IShares AEX vs. iShares II Public | IShares AEX vs. Vanguard FTSE All World | IShares AEX vs. iShares SP 500 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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