Correlation Between SSGA SPDR and IShares European

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

By analyzing existing cross correlation between SSGA SPDR ETFS and iShares European Property, you can compare the effects of market volatilities on SSGA SPDR and IShares European 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 IShares European. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSGA SPDR and IShares European.

Diversification Opportunities for SSGA SPDR and IShares European

0.0

Correlation Coefficient

SSGA SPDR  IShares European

Pay attention - limited upside

The 3 months correlation between SSGA and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SSGA SPDR ETFS and iShares European Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares European Property 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 ETFS are associated (or correlated) with IShares European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares European Property has no effect on the direction of SSGA SPDR i.e., SSGA SPDR and IShares European go up and down completely randomly.

Pair Corralation between SSGA SPDR and IShares European

If you would invest  2,430  in iShares European Property on September 17, 2024 and sell it today you would earn a total of  502.00  from holding iShares European Property or generate 20.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

SSGA SPDR ETFS  vs.  iShares European Property

SSGA SPDR ETFS

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days SSGA SPDR ETFS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SSGA SPDR is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

iShares European Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares European Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with SSGA SPDR and IShares European

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

The idea behind SSGA SPDR ETFS and iShares European Property 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.