Correlation Between Vanguard Growth and SSGA Active
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth 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 Vanguard Growth and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Index and SSGA Active Trust, you can compare the effects of market volatilities on Vanguard Growth 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 Vanguard Growth with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and SSGA Active.
Diversification Opportunities for Vanguard Growth and SSGA Active
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and SSGA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index 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 Vanguard Growth 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 Growth Index 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 Vanguard Growth i.e., Vanguard Growth and SSGA Active go up and down completely randomly.
Pair Corralation between Vanguard Growth and SSGA Active
Considering the 90-day investment horizon Vanguard Growth Index is expected to generate 3.95 times more return on investment than SSGA Active. However, Vanguard Growth is 3.95 times more volatile than SSGA Active Trust. It trades about 0.12 of its potential returns per unit of risk. SSGA Active Trust is currently generating about 0.09 per unit of risk. If you would invest 22,105 in Vanguard Growth Index on August 30, 2024 and sell it today you would earn a total of 18,467 from holding Vanguard Growth Index or generate 83.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. SSGA Active Trust
Performance |
| Timeline |
| Vanguard Growth Index |
| SSGA Active Trust |
Vanguard Growth and SSGA Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and SSGA Active
The main advantage of trading using opposite Vanguard Growth and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth 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.| Vanguard Growth vs. Vanguard Value Index | Vanguard Growth vs. Vanguard Information Technology | Vanguard Growth vs. Vanguard Small Cap Growth | Vanguard Growth vs. Vanguard Dividend Appreciation |
| SSGA Active vs. WisdomTree Interest Rate | SSGA Active vs. WisdomTree SmallCap Quality | SSGA Active vs. WisdomTree Emerging Markets | SSGA Active vs. WisdomTree Emerging Markets |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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