Correlation Between SSgA SPDR and Poxel SA

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

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

Diversification Opportunities for SSgA SPDR and Poxel SA

-0.7

Correlation Coefficient

SSgA SPDR  Poxel SA

Excellent diversification

The 3 months correlation between SSgA and Poxel is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR SP and Poxel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poxel SA and SSgA SPDR 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 SSgA SPDR SP are associated (or correlated) with Poxel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poxel SA has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Poxel SA go up and down completely randomly.

Pair Corralation between SSgA SPDR and Poxel SA

Assuming the 90 days trading horizon SSgA SPDR SP is expected to under-perform the Poxel SA. But the etf apears to be less risky and, when comparing its historical volatility, SSgA SPDR SP is 10.62 times less risky than Poxel SA. The etf trades about -0.2 of its potential returns per unit of risk. The Poxel SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Poxel SA on October 12, 2024 and sell it today you would earn a total of  5.00  from holding Poxel SA or generate 38.46% return on investment over 90 days.

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

SSgA SPDR SP  vs.  Poxel SA

SSgA SPDR SP

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR SP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SSgA SPDR is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Poxel SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poxel SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with SSgA SPDR and Poxel SA

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

The idea behind SSgA SPDR SP and Poxel SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.