Correlation Between AB Active and SSGA Active
Can any of the company-specific risk be diversified away by investing in both AB Active and SSGA Active 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 AB Active and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Active ETFs, and SSGA Active Trust, you can compare the effects of market volatilities on AB Active and SSGA Active 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 AB Active with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Active and SSGA Active.
Diversification Opportunities for AB Active and SSGA Active
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TAFM and SSGA is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding AB Active ETFs, and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust and AB Active 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 AB Active ETFs, are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of AB Active i.e., AB Active and SSGA Active go up and down completely randomly.
Pair Corralation between AB Active and SSGA Active
Given the investment horizon of 90 days AB Active ETFs, is expected to generate 1.59 times more return on investment than SSGA Active. However, AB Active is 1.59 times more volatile than SSGA Active Trust. It trades about 0.1 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.14 per unit of risk. If you would invest 2,470 in AB Active ETFs, on August 25, 2024 and sell it today you would earn a total of 84.00 from holding AB Active ETFs, or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
AB Active ETFs, vs. SSGA Active Trust
Performance |
| Timeline |
| AB Active ETFs, |
| SSGA Active Trust |
AB Active and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Active and SSGA Active
The main advantage of trading using opposite AB Active and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Active position performs unexpectedly, SSGA Active 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 Active will offset losses from the drop in SSGA Active's long position.| AB Active vs. SSGA Active Trust | AB Active vs. SPDR Nuveen Municipal | AB Active vs. Xtrackers California Municipal | AB Active vs. iShares Short Maturity |
| SSGA Active vs. BlackRock Intermediate Muni | SSGA Active vs. SSGA Active Trust | SSGA Active vs. SPDR MarketAxess Investment | SSGA Active vs. SSGA Active Trust |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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