Correlation Between Starboard Investment and SSGA Active

Can any of the company-specific risk be diversified away by investing in both Starboard Investment and SSGA Active 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 Starboard Investment and SSGA Active into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Starboard Investment Trust and SSGA Active Trust, you can compare the effects of market volatilities on Starboard Investment and SSGA Active 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 Starboard Investment with a short position of SSGA Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starboard Investment and SSGA Active.

Diversification Opportunities for Starboard Investment and SSGA Active

0.05

Correlation Coefficient

Starboard Investment  SSGA Active

Significant diversification

The 3 months correlation between Starboard and SSGA is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Starboard Investment Trust and SSGA Active Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSGA Active Trust and Starboard Investment 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 Starboard Investment Trust are associated (or correlated) with SSGA Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSGA Active Trust has no effect on the direction of Starboard Investment i.e., Starboard Investment and SSGA Active go up and down completely randomly.

Pair Corralation between Starboard Investment and SSGA Active

Given the investment horizon of 90 days Starboard Investment Trust is expected to under-perform the SSGA Active. In addition to that, Starboard Investment is 4.08 times more volatile than SSGA Active Trust. It trades about -0.11 of its total potential returns per unit of risk. SSGA Active Trust is currently generating about 0.32 per unit of volatility. If you would invest  2,528  in SSGA Active Trust on December 11, 2024 and sell it today you would earn a total of  68.00  from holding SSGA Active Trust or generate 2.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Starboard Investment Trust  vs.  SSGA Active Trust

Starboard Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Starboard Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

SSGA Active Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSGA Active Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SSGA Active is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Starboard Investment and SSGA Active

The main advantage of trading using opposite Starboard Investment and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starboard Investment position performs unexpectedly, SSGA Active 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 Active will offset losses from the drop in SSGA Active's long position.

The idea behind Starboard Investment Trust and SSGA Active Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.