Correlation Between SPDR FactSet and SPDR SSGA
Can any of the company-specific risk be diversified away by investing in both SPDR FactSet and SPDR SSGA 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 FactSet and SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR FactSet Innovative and SPDR SSGA Sector, you can compare the effects of market volatilities on SPDR FactSet and SPDR SSGA 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 FactSet with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR FactSet and SPDR SSGA.
Diversification Opportunities for SPDR FactSet and SPDR SSGA
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FactSet Innovative and SPDR SSGA Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Sector and SPDR FactSet 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 FactSet Innovative are associated (or correlated) with SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Sector has no effect on the direction of SPDR FactSet i.e., SPDR FactSet and SPDR SSGA go up and down completely randomly.
Pair Corralation between SPDR FactSet and SPDR SSGA
Given the investment horizon of 90 days SPDR FactSet Innovative is expected to generate 2.01 times more return on investment than SPDR SSGA. However, SPDR FactSet is 2.01 times more volatile than SPDR SSGA Sector. It trades about 0.26 of its potential returns per unit of risk. SPDR SSGA Sector is currently generating about 0.17 per unit of risk. If you would invest 15,458 in SPDR FactSet Innovative on August 30, 2024 and sell it today you would earn a total of 2,573 from holding SPDR FactSet Innovative or generate 16.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR FactSet Innovative vs. SPDR SSGA Sector
Performance |
| Timeline |
| SPDR FactSet Innovative |
| SPDR SSGA Sector |
SPDR FactSet and SPDR SSGA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR FactSet and SPDR SSGA
The main advantage of trading using opposite SPDR FactSet and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR FactSet position performs unexpectedly, SPDR SSGA 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 SPDR SSGA will offset losses from the drop in SPDR SSGA's long position.| SPDR FactSet vs. SPDR SP Software | SPDR FactSet vs. SPDR Morgan Stanley | SPDR FactSet vs. SPDR SP Health |
| SPDR SSGA vs. SPDR SSGA Fixed | SPDR SSGA vs. BlackRock Equity Factor | SPDR SSGA vs. SPDR FactSet Innovative | SPDR SSGA vs. SPDR SP Telecom |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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