Correlation Between SPDR SSgA and Fidelity Limited
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA and Fidelity Limited 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 SPDR SSgA and Fidelity Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSgA Ultra and Fidelity Limited Term, you can compare the effects of market volatilities on SPDR SSgA and Fidelity Limited 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 SPDR SSgA with a short position of Fidelity Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and Fidelity Limited.
Diversification Opportunities for SPDR SSgA and Fidelity Limited
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPDR and Fidelity is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Ultra and Fidelity Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Limited Term and SPDR SSgA 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 SPDR SSgA Ultra are associated (or correlated) with Fidelity Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Limited Term has no effect on the direction of SPDR SSgA i.e., SPDR SSgA and Fidelity Limited go up and down completely randomly.
Pair Corralation between SPDR SSgA and Fidelity Limited
Given the investment horizon of 90 days SPDR SSgA Ultra is expected to generate 0.39 times more return on investment than Fidelity Limited. However, SPDR SSgA Ultra is 2.56 times less risky than Fidelity Limited. It trades about 0.34 of its potential returns per unit of risk. Fidelity Limited Term is currently generating about -0.09 per unit of risk. If you would invest 4,041 in SPDR SSgA Ultra on August 24, 2024 and sell it today you would earn a total of 12.00 from holding SPDR SSgA Ultra or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR SSgA Ultra vs. Fidelity Limited Term
Performance |
| Timeline |
| SPDR SSgA Ultra |
| Fidelity Limited Term |
SPDR SSgA and Fidelity Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and Fidelity Limited
The main advantage of trading using opposite SPDR SSgA and Fidelity Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA position performs unexpectedly, Fidelity Limited 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 Fidelity Limited will offset losses from the drop in Fidelity Limited's long position.| SPDR SSgA vs. SPDR Bloomberg Investment | SPDR SSgA vs. SPDR Bloomberg 1 10 | SPDR SSgA vs. iShares Short Maturity | SPDR SSgA vs. Invesco Ultra Short |
| Fidelity Limited vs. Fidelity Corporate Bond | Fidelity Limited vs. Fidelity Total Bond | Fidelity Limited vs. Fidelity High Yield | Fidelity Limited vs. Fidelity Momentum Factor |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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