Correlation Between SPDR SP and SPDR SSGA

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

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

Diversification Opportunities for SPDR SP and SPDR SSGA

0.8

Correlation Coefficient

SPDR SP  SPDR SSGA

Very poor diversification

The 3 months correlation between SPDR and SPDR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Kensho 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 SPDR SP 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 SP Kensho 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 SPDR SP i.e., SPDR SP and SPDR SSGA go up and down completely randomly.

Pair Corralation between SPDR SP and SPDR SSGA

Given the investment horizon of 90 days SPDR SP Kensho is expected to generate 24.83 times more return on investment than SPDR SSGA. However, SPDR SP is 24.83 times more volatile than SPDR SSGA My2026. It trades about 0.13 of its potential returns per unit of risk. SPDR SSGA My2026 is currently generating about 0.24 per unit of risk. If you would invest  5,408  in SPDR SP Kensho on October 8, 2024 and sell it today you would earn a total of  444.00  from holding SPDR SP Kensho or generate 8.21% return on investment over 90 days.

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

SPDR SP Kensho  vs.  SPDR SSGA My2026

SPDR SP Kensho

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP Kensho are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward-looking signals, SPDR SP unveiled solid returns over the last few months and may actually be approaching a breakup point.

SPDR SSGA My2026

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA My2026 are ranked lower than 16 (%) 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 SPDR SP and SPDR SSGA

The main advantage of trading using opposite SPDR SP and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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 SPDR SP Kensho 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.