Correlation Between SPDR SSGA and FolioBeyond Rising

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

By analyzing existing cross correlation between SPDR SSGA Fixed and FolioBeyond Rising Rates, you can compare the effects of market volatilities on SPDR SSGA and FolioBeyond Rising 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 FolioBeyond Rising. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and FolioBeyond Rising.

Diversification Opportunities for SPDR SSGA and FolioBeyond Rising

-0.96

Correlation Coefficient

SPDR SSGA  FolioBeyond Rising

Pay attention - limited upside

The 3 months correlation between SPDR and FolioBeyond is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Fixed and FolioBeyond Rising Rates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FolioBeyond Rising Rates 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 Fixed are associated (or correlated) with FolioBeyond Rising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FolioBeyond Rising Rates has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and FolioBeyond Rising go up and down completely randomly.

Pair Corralation between SPDR SSGA and FolioBeyond Rising

Given the investment horizon of 90 days SPDR SSGA Fixed is expected to under-perform the FolioBeyond Rising. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SSGA Fixed is 1.78 times less risky than FolioBeyond Rising. The etf trades about -0.06 of its potential returns per unit of risk. The FolioBeyond Rising Rates is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,331  in FolioBeyond Rising Rates on September 4, 2024 and sell it today you would earn a total of  199.00  from holding FolioBeyond Rising Rates or generate 5.97% return on investment over 90 days.

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

SPDR SSGA Fixed  vs.  FolioBeyond Rising Rates

SPDR SSGA Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR SSGA Fixed has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, SPDR SSGA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

FolioBeyond Rising Rates

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FolioBeyond Rising Rates are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, FolioBeyond Rising is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SPDR SSGA and FolioBeyond Rising

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

The idea behind SPDR SSGA Fixed and FolioBeyond Rising Rates 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.