Correlation Between VanEck Vectors and SPDR SSGA

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

By analyzing existing cross correlation between VanEck Vectors ETF and SPDR SSGA My2029, you can compare the effects of market volatilities on VanEck Vectors 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 VanEck Vectors with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Vectors and SPDR SSGA.

Diversification Opportunities for VanEck Vectors and SPDR SSGA

0.45

Correlation Coefficient

VanEck Vectors  SPDR SSGA

Very weak diversification

The 3 months correlation between VanEck and SPDR is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Vectors ETF and SPDR SSGA My2029 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2029 and VanEck Vectors 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 VanEck Vectors ETF 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 My2029 has no effect on the direction of VanEck Vectors i.e., VanEck Vectors and SPDR SSGA go up and down completely randomly.

Pair Corralation between VanEck Vectors and SPDR SSGA

Considering the 90-day investment horizon VanEck Vectors ETF is expected to generate 1.29 times more return on investment than SPDR SSGA. However, VanEck Vectors is 1.29 times more volatile than SPDR SSGA My2029. It trades about 0.02 of its potential returns per unit of risk. SPDR SSGA My2029 is currently generating about -0.04 per unit of risk. If you would invest  4,589  in VanEck Vectors ETF on October 8, 2024 and sell it today you would earn a total of  10.00  from holding VanEck Vectors ETF or generate 0.22% return on investment over 90 days.

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

VanEck Vectors ETF  vs.  SPDR SSGA My2029

VanEck Vectors ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Vectors ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, VanEck Vectors is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

SPDR SSGA My2029

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPDR SSGA My2029 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, SPDR SSGA is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with VanEck Vectors and SPDR SSGA

The main advantage of trading using opposite VanEck Vectors and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Vectors 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 VanEck Vectors ETF and SPDR SSGA My2029 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.