Correlation Between SSgA SPDR and Xtrackers
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and Xtrackers 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 Xtrackers 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 Xtrackers II , you can compare the effects of market volatilities on SSgA SPDR and Xtrackers 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 Xtrackers. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and Xtrackers.
Diversification Opportunities for SSgA SPDR and Xtrackers
Excellent diversification
The 3 months correlation between SSgA and Xtrackers is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Xtrackers II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers II 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 Xtrackers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers II has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Xtrackers go up and down completely randomly.
Pair Corralation between SSgA SPDR and Xtrackers
Assuming the 90 days trading horizon SSgA SPDR is expected to generate 428.15 times less return on investment than Xtrackers. But when comparing it to its historical volatility, SSgA SPDR ETFs is 108.37 times less risky than Xtrackers. It trades about 0.01 of its potential returns per unit of risk. Xtrackers II is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 901.00 in Xtrackers II on September 5, 2024 and sell it today you would lose (115.00) from holding Xtrackers II or give up 12.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. Xtrackers II
Performance |
| Timeline |
| SSgA SPDR ETFs |
| Xtrackers II |
SSgA SPDR and Xtrackers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and Xtrackers
The main advantage of trading using opposite SSgA SPDR and Xtrackers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, Xtrackers 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 Xtrackers will offset losses from the drop in Xtrackers' long position.| SSgA SPDR vs. UBS Fund Solutions | SSgA SPDR vs. Xtrackers II | SSgA SPDR vs. Xtrackers Nikkei 225 | SSgA SPDR vs. iShares VII PLC |
| Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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