Correlation Between SPDR SSGA and Impact Shares

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

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

Diversification Opportunities for SPDR SSGA and Impact Shares

0.93

Correlation Coefficient

SPDR SSGA  Impact Shares

Almost no diversification

The 3 months correlation between SPDR and Impact is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Gender and Impact Shares NAACP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact Shares NAACP 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 Gender are associated (or correlated) with Impact Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact Shares NAACP has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and Impact Shares go up and down completely randomly.

Pair Corralation between SPDR SSGA and Impact Shares

Considering the 90-day investment horizon SPDR SSGA is expected to generate 1.86 times less return on investment than Impact Shares. But when comparing it to its historical volatility, SPDR SSGA Gender is 1.37 times less risky than Impact Shares. It trades about 0.08 of its potential returns per unit of risk. Impact Shares NAACP is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  4,196  in Impact Shares NAACP on October 25, 2024 and sell it today you would earn a total of  75.00  from holding Impact Shares NAACP or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	94.74%
Values	Daily Returns

SPDR SSGA Gender  vs.  Impact Shares NAACP

SPDR SSGA Gender

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA Gender are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, SPDR SSGA is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Impact Shares NAACP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Impact Shares NAACP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Impact Shares is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SPDR SSGA and Impact Shares

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

The idea behind SPDR SSGA Gender and Impact Shares NAACP 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.

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.