Correlation Between Disney and SPDR SSGA

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

By analyzing existing cross correlation between Walt Disney and SPDR SSGA My2026, you can compare the effects of market volatilities on Disney 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 Disney with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and SPDR SSGA.

Diversification Opportunities for Disney and SPDR SSGA

0.65

Correlation Coefficient

Disney  SPDR SSGA

Poor diversification

The 3 months correlation between Disney and SPDR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and SPDR SSGA My2026 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2026 and Disney 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 Walt Disney 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 My2026 has no effect on the direction of Disney i.e., Disney and SPDR SSGA go up and down completely randomly.

Pair Corralation between Disney and SPDR SSGA

Considering the 90-day investment horizon Walt Disney is expected to under-perform the SPDR SSGA. In addition to that, Disney is 16.81 times more volatile than SPDR SSGA My2026. It trades about -0.18 of its total potential returns per unit of risk. SPDR SSGA My2026 is currently generating about 0.48 per unit of volatility. If you would invest  2,489  in SPDR SSGA My2026 on October 23, 2024 and sell it today you would earn a total of  10.00  from holding SPDR SSGA My2026 or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Walt Disney  vs.  SPDR SSGA My2026

Walt Disney

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Walt Disney are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Disney may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SPDR SSGA My2026

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA My2026 are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, SPDR SSGA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Disney and SPDR SSGA

The main advantage of trading using opposite Disney and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.

The idea behind Walt Disney and SPDR SSGA My2026 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.