Correlation Between Ssga International and Value Line

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

By analyzing existing cross correlation between Ssga International Stock and Value Line Income, you can compare the effects of market volatilities on Ssga International and Value Line 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 International with a short position of Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssga International and Value Line.

Diversification Opportunities for Ssga International and Value Line

0.59

Correlation Coefficient

Ssga International  Value Line

Very weak diversification

The 3 months correlation between Ssga and Value is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ssga International Stock and Value Line Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Income and Ssga International 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 International Stock are associated (or correlated) with Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Income has no effect on the direction of Ssga International i.e., Ssga International and Value Line go up and down completely randomly.

Pair Corralation between Ssga International and Value Line

Assuming the 90 days horizon Ssga International Stock is expected to generate 0.75 times more return on investment than Value Line. However, Ssga International Stock is 1.33 times less risky than Value Line. It trades about 0.15 of its potential returns per unit of risk. Value Line Income is currently generating about -0.01 per unit of risk. If you would invest  1,105  in Ssga International Stock on November 29, 2024 and sell it today you would earn a total of  71.00  from holding Ssga International Stock or generate 6.43% return on investment over 90 days.

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

Ssga International Stock  vs.  Value Line Income

Ssga International Stock

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ssga International Stock are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Ssga International may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Value Line Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Value Line Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Value Line is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ssga International and Value Line

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

The idea behind Ssga International Stock and Value Line Income 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.