Correlation Between VanEck Vectors and SPDR SSGA

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

By analyzing existing cross correlation between VanEck Vectors Moodys and SPDR SSGA My2033, you can compare the effects of market volatilities on VanEck Vectors 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 VanEck Vectors with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and SPDR SSGA.

Diversification Opportunities for VanEck Vectors and SPDR SSGA

1.0

Correlation Coefficient

VanEck Vectors  SPDR SSGA

No risk reduction

The 3 months correlation between VanEck and SPDR is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors Moodys and SPDR SSGA My2033 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2033 and VanEck Vectors 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 Vectors Moodys 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 My2033 has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and SPDR SSGA go up and down completely randomly.

Pair Corralation between VanEck Vectors and SPDR SSGA

Given the investment horizon of 90 days VanEck Vectors is expected to generate 1.08 times less return on investment than SPDR SSGA. But when comparing it to its historical volatility, VanEck Vectors Moodys is 1.06 times less risky than SPDR SSGA. It trades about 0.12 of its potential returns per unit of risk. SPDR SSGA My2033 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,370  in SPDR SSGA My2033 on December 19, 2024 and sell it today you would earn a total of  56.00  from holding SPDR SSGA My2033 or generate 2.36% return on investment over 90 days.

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

VanEck Vectors Moodys  vs.  SPDR SSGA My2033

VanEck Vectors Moodys

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vectors Moodys are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, VanEck Vectors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPDR SSGA My2033

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA My2033 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, SPDR SSGA is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with VanEck Vectors and SPDR SSGA

The main advantage of trading using opposite VanEck Vectors and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors 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 VanEck Vectors Moodys and SPDR SSGA My2033 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.