Correlation Between Ssga International and Msift High

Can any of the company-specific risk be diversified away by investing in both Ssga International and Msift High 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 Msift High 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 Msift High Yield, you can compare the effects of market volatilities on Ssga International and Msift High 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 Msift High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssga International and Msift High.

Diversification Opportunities for Ssga International and Msift High

-0.33

Correlation Coefficient

Ssga International  Msift High

Very good diversification

The 3 months correlation between Ssga and Msift is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ssga International Stock and Msift High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msift High Yield 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 Msift High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msift High Yield has no effect on the direction of Ssga International i.e., Ssga International and Msift High go up and down completely randomly.

Pair Corralation between Ssga International and Msift High

Assuming the 90 days horizon Ssga International Stock is expected to under-perform the Msift High. In addition to that, Ssga International is 5.89 times more volatile than Msift High Yield. It trades about -0.32 of its total potential returns per unit of risk. Msift High Yield is currently generating about -0.19 per unit of volatility. If you would invest  858.00  in Msift High Yield on October 12, 2024 and sell it today you would lose (5.00) from holding Msift High Yield or give up 0.58% of portfolio value over 90 days.

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

Ssga International Stock  vs.  Msift High Yield

Ssga International Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ssga International Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Msift High Yield

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Msift High Yield are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Msift High 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 Msift High

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

The idea behind Ssga International Stock and Msift High Yield 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.