Correlation Between DB Base and SSGA Active

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

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

Diversification Opportunities for DB Base and SSGA Active

0.0

Correlation Coefficient

DB Base  SSGA Active

Pay attention - limited upside

The 3 months correlation between BDDXF and SSGA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DB Base Metals 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 DB Base 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 DB Base Metals 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 DB Base i.e., DB Base and SSGA Active go up and down completely randomly.

Pair Corralation between DB Base and SSGA Active

If you would invest  2,919  in SSGA Active Trust on December 19, 2024 and sell it today you would earn a total of  14.00  from holding SSGA Active Trust or generate 0.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

DB Base Metals  vs.  SSGA Active Trust

DB Base Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days DB Base Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DB Base is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SSGA Active Trust

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SSGA Active Trust are ranked lower than 3 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DB Base and SSGA Active

The main advantage of trading using opposite DB Base and SSGA Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Base 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 DB Base Metals 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.