Correlation Between IShares Core and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both IShares Core and SSgA SPDR 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 IShares Core and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and SSgA SPDR ETFs, you can compare the effects of market volatilities on IShares Core and SSgA SPDR 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 IShares Core with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and SSgA SPDR.
Diversification Opportunities for IShares Core and SSgA SPDR
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and SSgA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and IShares Core 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 iShares Core SP are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of IShares Core i.e., IShares Core and SSgA SPDR go up and down completely randomly.
Pair Corralation between IShares Core and SSgA SPDR
Assuming the 90 days trading horizon iShares Core SP is expected to generate 2.08 times more return on investment than SSgA SPDR. However, IShares Core is 2.08 times more volatile than SSgA SPDR ETFs. It trades about 0.11 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.01 per unit of risk. If you would invest 38,988 in iShares Core SP on September 4, 2024 and sell it today you would earn a total of 22,032 from holding iShares Core SP or generate 56.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Core SP vs. SSgA SPDR ETFs
Performance |
| Timeline |
| iShares Core SP |
| SSgA SPDR ETFs |
IShares Core and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and SSgA SPDR
The main advantage of trading using opposite IShares Core and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, SSgA SPDR 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 SPDR will offset losses from the drop in SSgA SPDR's long position.| IShares Core vs. iShares Govt Bond | IShares Core vs. iShares Global AAA AA | IShares Core vs. iShares Smart City | IShares Core vs. iShares Broad High |
| SSgA SPDR vs. UBS Fund Solutions | SSgA SPDR vs. Xtrackers II | SSgA SPDR vs. Xtrackers Nikkei 225 | SSgA SPDR vs. iShares VII PLC |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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