Correlation Between SPDR SSGA and SPDR SP
Can any of the company-specific risk be diversified away by investing in both SPDR SSGA and SPDR SP 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 SPDR SSGA and SPDR SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSGA Fixed and SPDR SP Telecom, you can compare the effects of market volatilities on SPDR SSGA and SPDR SP 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 SPDR SSGA with a short position of SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and SPDR SP.
Diversification Opportunities for SPDR SSGA and SPDR SP
Average diversification
The 3 months correlation between SPDR and SPDR is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA Fixed and SPDR SP Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Telecom and SPDR SSGA 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 SPDR SSGA Fixed are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Telecom has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and SPDR SP go up and down completely randomly.
Pair Corralation between SPDR SSGA and SPDR SP
Given the investment horizon of 90 days SPDR SSGA is expected to generate 37.54 times less return on investment than SPDR SP. But when comparing it to its historical volatility, SPDR SSGA Fixed is 5.04 times less risky than SPDR SP. It trades about 0.02 of its potential returns per unit of risk. SPDR SP Telecom is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,976 in SPDR SP Telecom on March 31, 2025 and sell it today you would earn a total of 1,656 from holding SPDR SP Telecom or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSGA Fixed vs. SPDR SP Telecom
Performance |
| Timeline |
| SPDR SSGA Fixed |
| SPDR SP Telecom |
SPDR SSGA and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSGA and SPDR SP
The main advantage of trading using opposite SPDR SSGA and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSGA position performs unexpectedly, SPDR SP 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 SP will offset losses from the drop in SPDR SP's long position.| SPDR SSGA vs. SPDR SSGA Sector | SPDR SSGA vs. SPDR DoubleLine Emerging | SPDR SSGA vs. SPDR DoubleLine Short | SPDR SSGA vs. SPDR SSgA Ultra |
| SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Software | SPDR SP vs. SPDR SP Health | SPDR SP vs. SPDR SP Transportation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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