Correlation Between VanEck Defense and SSgA SPDR
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By analyzing existing cross correlation between VanEck Defense ETF and SSgA SPDR ETFs, you can compare the effects of market volatilities on VanEck Defense and SSgA SPDR 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 VanEck Defense with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Defense and SSgA SPDR.
Diversification Opportunities for VanEck Defense and SSgA SPDR
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and SSgA is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Defense ETF and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and VanEck Defense 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 VanEck Defense ETF are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of VanEck Defense i.e., VanEck Defense and SSgA SPDR go up and down completely randomly.
Pair Corralation between VanEck Defense and SSgA SPDR
Assuming the 90 days trading horizon VanEck Defense ETF is expected to generate 1.68 times more return on investment than SSgA SPDR. However, VanEck Defense is 1.68 times more volatile than SSgA SPDR ETFs. It trades about 0.14 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.05 per unit of risk. If you would invest 1,853 in VanEck Defense ETF on September 23, 2024 and sell it today you would earn a total of 1,607 from holding VanEck Defense ETF or generate 86.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 86.79% |
Values | Daily Returns |
VanEck Defense ETF vs. SSgA SPDR ETFs
Performance |
Timeline |
VanEck Defense ETF |
SSgA SPDR ETFs |
VanEck Defense and SSgA SPDR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VanEck Defense and SSgA SPDR
The main advantage of trading using opposite VanEck Defense and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Defense position performs unexpectedly, SSgA SPDR 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 SPDR will offset losses from the drop in SSgA SPDR's long position.VanEck Defense vs. UBS Fund Solutions | VanEck Defense vs. Xtrackers II | VanEck Defense vs. Xtrackers Nikkei 225 | VanEck Defense vs. iShares VII PLC |
SSgA SPDR vs. UBS Fund Solutions | SSgA SPDR vs. Xtrackers II | SSgA SPDR vs. Xtrackers Nikkei 225 | SSgA SPDR vs. iShares VII PLC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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