Correlation Between Xtrackers and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Xtrackers 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 Xtrackers and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers II and SSgA SPDR ETFs, you can compare the effects of market volatilities on Xtrackers 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 Xtrackers with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and SSgA SPDR.
Diversification Opportunities for Xtrackers and SSgA SPDR
Very good diversification
The 3 months correlation between Xtrackers and SSgA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II 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 Xtrackers 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 Xtrackers II 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 Xtrackers i.e., Xtrackers and SSgA SPDR go up and down completely randomly.
Pair Corralation between Xtrackers and SSgA SPDR
Assuming the 90 days trading horizon Xtrackers II is expected to under-perform the SSgA SPDR. In addition to that, Xtrackers is 1.3 times more volatile than SSgA SPDR ETFs. It trades about -0.01 of its total potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.28 per unit of volatility. If you would invest 3,411 in SSgA SPDR ETFs on September 1, 2024 and sell it today you would earn a total of 78.00 from holding SSgA SPDR ETFs or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers II vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Xtrackers II |
| SSgA SPDR ETFs |
Xtrackers and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and SSgA SPDR
The main advantage of trading using opposite Xtrackers and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers 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.| Xtrackers vs. UBS Fund Solutions | Xtrackers vs. Xtrackers Nikkei 225 | Xtrackers vs. iShares VII PLC | Xtrackers vs. Vanguard Funds Public |
| SSgA SPDR vs. UBS Fund Solutions | SSgA SPDR vs. Xtrackers Nikkei 225 | SSgA SPDR vs. iShares VII PLC | SSgA SPDR vs. Vanguard Funds Public |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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