Correlation Between SPDR SSGA and Pacer Export

Can any of the company-specific risk be diversified away by investing in both SPDR SSGA and Pacer Export 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 Pacer Export 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 Pacer Export Leaders, you can compare the effects of market volatilities on SPDR SSGA and Pacer Export 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 Pacer Export. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and Pacer Export.

Diversification Opportunities for SPDR SSGA and Pacer Export

0.51

Correlation Coefficient

SPDR SSGA  Pacer Export

Very weak diversification

The 3 months correlation between SPDR and Pacer is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Gender and Pacer Export Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Export Leaders 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 Pacer Export. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Export Leaders has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and Pacer Export go up and down completely randomly.

Pair Corralation between SPDR SSGA and Pacer Export

Considering the 90-day investment horizon SPDR SSGA Gender is expected to generate 0.75 times more return on investment than Pacer Export. However, SPDR SSGA Gender is 1.33 times less risky than Pacer Export. It trades about 0.1 of its potential returns per unit of risk. Pacer Export Leaders is currently generating about 0.05 per unit of risk. If you would invest  7,923  in SPDR SSGA Gender on October 11, 2024 and sell it today you would earn a total of  3,728  from holding SPDR SSGA Gender or generate 47.05% return on investment over 90 days.

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

SPDR SSGA Gender  vs.  Pacer Export Leaders

SPDR SSGA Gender

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA Gender are ranked lower than 1 (%) 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.

Pacer Export Leaders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacer Export Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Pacer Export is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SPDR SSGA and Pacer Export

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

The idea behind SPDR SSGA Gender and Pacer Export Leaders 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..