Correlation Between SSgA SPDR and WisdomTree Silver
Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and WisdomTree Silver 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 WisdomTree Silver 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 WisdomTree Silver 3x, you can compare the effects of market volatilities on SSgA SPDR and WisdomTree Silver 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 WisdomTree Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and WisdomTree Silver.
Diversification Opportunities for SSgA SPDR and WisdomTree Silver
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SSgA and WisdomTree is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and WisdomTree Silver 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Silver 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 WisdomTree Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Silver has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and WisdomTree Silver go up and down completely randomly.
Pair Corralation between SSgA SPDR and WisdomTree Silver
Assuming the 90 days trading horizon SSgA SPDR ETFs is expected to generate 0.28 times more return on investment than WisdomTree Silver. However, SSgA SPDR ETFs is 3.57 times less risky than WisdomTree Silver. It trades about 0.06 of its potential returns per unit of risk. WisdomTree Silver 3x is currently generating about -0.22 per unit of risk. If you would invest 17,420 in SSgA SPDR ETFs on August 24, 2024 and sell it today you would earn a total of 274.00 from holding SSgA SPDR ETFs or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA SPDR ETFs vs. WisdomTree Silver 3x
Performance |
| Timeline |
| SSgA SPDR ETFs |
| WisdomTree Silver |
SSgA SPDR and WisdomTree Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA SPDR and WisdomTree Silver
The main advantage of trading using opposite SSgA SPDR and WisdomTree Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA SPDR position performs unexpectedly, WisdomTree Silver 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 WisdomTree Silver will offset losses from the drop in WisdomTree Silver's long position.| SSgA SPDR vs. SSgA SPDR Barclays | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs | SSgA SPDR vs. SSgA SPDR ETFs |
| WisdomTree Silver vs. WisdomTree Zinc | WisdomTree Silver vs. WisdomTree Brent Crude | WisdomTree Silver vs. WisdomTree Aluminium 2x | WisdomTree Silver vs. WisdomTree Enhanced Commodity |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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