Correlation Between Vanguard Total and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and SSgA SPDR ETFs, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and SSgA SPDR.
Diversification Opportunities for Vanguard Total and SSgA SPDR
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and SSgA is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock 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 Vanguard Total 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 Vanguard Total Stock 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 Vanguard Total i.e., Vanguard Total and SSgA SPDR go up and down completely randomly.
Pair Corralation between Vanguard Total and SSgA SPDR
Considering the 90-day investment horizon Vanguard Total Stock is expected to generate 1.32 times more return on investment than SSgA SPDR. However, Vanguard Total is 1.32 times more volatile than SSgA SPDR ETFs. It trades about 0.14 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.15 per unit of risk. If you would invest 25,880 in Vanguard Total Stock on September 1, 2024 and sell it today you would earn a total of 4,106 from holding Vanguard Total Stock or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vanguard Total Stock vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Vanguard Total Stock |
| SSgA SPDR ETFs |
Vanguard Total and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and SSgA SPDR
The main advantage of trading using opposite Vanguard Total and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
| SSgA SPDR vs. Vanguard Total Stock | SSgA SPDR vs. SPDR SP 500 | SSgA SPDR vs. iShares Core SP | SSgA SPDR vs. Vanguard Total Bond |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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