Correlation Between SPDR SSGA and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both SPDR SSGA 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 SSGA 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 SSGA Sector and SPDR SSgA Ultra, you can compare the effects of market volatilities on SPDR SSGA 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 SSGA with a short position of SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and SPDR SSgA.
Diversification Opportunities for SPDR SSGA and SPDR SSgA
Very poor diversification
The 3 months correlation between SPDR and SPDR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Sector and SPDR SSgA Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Ultra 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 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 Ultra has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and SPDR SSgA go up and down completely randomly.
Pair Corralation between SPDR SSGA and SPDR SSgA
Given the investment horizon of 90 days SPDR SSGA Sector is expected to generate 17.11 times more return on investment than SPDR SSgA. However, SPDR SSGA is 17.11 times more volatile than SPDR SSgA Ultra. It trades about 0.21 of its potential returns per unit of risk. SPDR SSgA Ultra is currently generating about 0.38 per unit of risk. If you would invest 5,259 in SPDR SSGA Sector on August 30, 2024 and sell it today you would earn a total of 192.00 from holding SPDR SSGA Sector or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSGA Sector vs. SPDR SSgA Ultra
Performance |
| Timeline |
| SPDR SSGA Sector |
| SPDR SSgA Ultra |
SPDR SSGA and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSGA and SPDR SSgA
The main advantage of trading using opposite SPDR SSGA and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSGA 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 SSGA vs. SPDR SSGA Fixed | SPDR SSGA vs. BlackRock Equity Factor | SPDR SSGA vs. SPDR FactSet Innovative | SPDR SSGA vs. SPDR SP Telecom |
| SPDR SSgA vs. SPDR Bloomberg Investment | SPDR SSgA vs. SPDR Bloomberg 1 10 | SPDR SSgA vs. iShares Short Maturity | SPDR SSgA vs. Invesco Ultra Short |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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