Correlation Between SPDR SSGA and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR SSGA and SPDR SP 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 SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSGA Large and SPDR SP 500, you can compare the effects of market volatilities on SPDR SSGA and SPDR SP 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 SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and SPDR SP.
Diversification Opportunities for SPDR SSGA and SPDR SP
Almost no diversification
The 3 months correlation between SPDR and SPDR is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Large and SPDR SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP 500 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 Large are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP 500 has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR SSGA and SPDR SP
Given the investment horizon of 90 days SPDR SSGA Large is expected to under-perform the SPDR SP. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SSGA Large is 1.13 times less risky than SPDR SP. The etf trades about -0.29 of its potential returns per unit of risk. The SPDR SP 500 is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 51,571 in SPDR SP 500 on January 19, 2024 and sell it today you would lose (1,516) from holding SPDR SP 500 or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR SSGA Large vs. SPDR SP 500
Performance |
| Timeline |
| SPDR SSGA Large |
| SPDR SP 500 |
SPDR SSGA and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSGA and SPDR SP
The main advantage of trading using opposite SPDR SSGA and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSGA position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| SPDR SSGA vs. Dimensional Targeted Value | SPDR SSGA vs. Dimensional World ex | SPDR SSGA vs. Dimensional Small Cap |
| SPDR SP vs. Dimensional Targeted Value | SPDR SP vs. Dimensional World ex | SPDR SP vs. Dimensional Small Cap |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |