Correlation Between SPDR SSGA and BondBloxx ETF

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

By analyzing existing cross correlation between SPDR SSGA My2027 and BondBloxx ETF Trust, you can compare the effects of market volatilities on SPDR SSGA and BondBloxx ETF 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 BondBloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and BondBloxx ETF.

Diversification Opportunities for SPDR SSGA and BondBloxx ETF

0.73

Correlation Coefficient

SPDR SSGA  BondBloxx ETF

Poor diversification

The 3 months correlation between SPDR and BondBloxx is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA My2027 and BondBloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BondBloxx ETF Trust 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 My2027 are associated (or correlated) with BondBloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BondBloxx ETF Trust has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and BondBloxx ETF go up and down completely randomly.

Pair Corralation between SPDR SSGA and BondBloxx ETF

Given the investment horizon of 90 days SPDR SSGA is expected to generate 1.07 times less return on investment than BondBloxx ETF. But when comparing it to its historical volatility, SPDR SSGA My2027 is 2.88 times less risky than BondBloxx ETF. It trades about 0.29 of its potential returns per unit of risk. BondBloxx ETF Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,875  in BondBloxx ETF Trust on December 20, 2024 and sell it today you would earn a total of  67.00  from holding BondBloxx ETF Trust or generate 1.73% return on investment over 90 days.

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

SPDR SSGA My2027  vs.  BondBloxx ETF Trust

SPDR SSGA My2027

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA My2027 are ranked lower than 23 (%) 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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

BondBloxx ETF Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BondBloxx ETF Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, BondBloxx ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR SSGA and BondBloxx ETF

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

The idea behind SPDR SSGA My2027 and BondBloxx ETF 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.