Correlation Between SPDR SSGA and Day HaganNed
Can any of the company-specific risk be diversified away by investing in both SPDR SSGA and Day HaganNed 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 SSGA and Day HaganNed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSGA Sector and Day HaganNed Davis, you can compare the effects of market volatilities on SPDR SSGA and Day HaganNed 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 SSGA with a short position of Day HaganNed. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and Day HaganNed.
Diversification Opportunities for SPDR SSGA and Day HaganNed
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and Day is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Sector and Day HaganNed Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day HaganNed Davis and SPDR SSGA 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 SSGA Sector are associated (or correlated) with Day HaganNed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day HaganNed Davis has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and Day HaganNed go up and down completely randomly.
Pair Corralation between SPDR SSGA and Day HaganNed
Given the investment horizon of 90 days SPDR SSGA is expected to generate 1.0 times less return on investment than Day HaganNed. But when comparing it to its historical volatility, SPDR SSGA Sector is 1.07 times less risky than Day HaganNed. It trades about 0.4 of its potential returns per unit of risk. Day HaganNed Davis is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 4,116 in Day HaganNed Davis on September 1, 2024 and sell it today you would earn a total of 266.00 from holding Day HaganNed Davis or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR SSGA Sector vs. Day HaganNed Davis
Performance |
| Timeline |
| SPDR SSGA Sector |
| Day HaganNed Davis |
SPDR SSGA and Day HaganNed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSGA and Day HaganNed
The main advantage of trading using opposite SPDR SSGA and Day HaganNed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSGA position performs unexpectedly, Day HaganNed 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 Day HaganNed will offset losses from the drop in Day HaganNed's long position.| SPDR SSGA vs. SPDR SSGA Fixed | SPDR SSGA vs. BlackRock Equity Factor | SPDR SSGA vs. SPDR FactSet Innovative | SPDR SSGA vs. SPDR SP Telecom |
| Day HaganNed vs. SPDR SSGA Sector | Day HaganNed vs. Inspire International ESG | Day HaganNed vs. Overlay Shares Large | Day HaganNed vs. Timothy Plan Small |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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