Correlation Between 360 Finance and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both 360 Finance and SSgA SPDR 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 360 Finance and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 360 Finance and SSgA SPDR ETFs, you can compare the effects of market volatilities on 360 Finance 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 360 Finance with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Finance and SSgA SPDR.
Diversification Opportunities for 360 Finance and SSgA SPDR
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 360 and SSgA is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding 360 Finance 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 360 Finance 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 360 Finance 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 360 Finance i.e., 360 Finance and SSgA SPDR go up and down completely randomly.
Pair Corralation between 360 Finance and SSgA SPDR
Given the investment horizon of 90 days 360 Finance is expected to generate 7.26 times more return on investment than SSgA SPDR. However, 360 Finance is 7.26 times more volatile than SSgA SPDR ETFs. It trades about 0.15 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.06 per unit of risk. If you would invest 1,395 in 360 Finance on October 5, 2024 and sell it today you would earn a total of 2,488 from holding 360 Finance or generate 178.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
360 Finance vs. SSgA SPDR ETFs
Performance |
Timeline |
360 Finance |
SSgA SPDR ETFs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
360 Finance and SSgA SPDR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 360 Finance and SSgA SPDR
The main advantage of trading using opposite 360 Finance and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Finance 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.360 Finance vs. Asure Software | 360 Finance vs. Naked Wines plc | 360 Finance vs. Celsius Holdings | 360 Finance vs. Cadence Design Systems |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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