Correlation Between SSgA and DWTR
Can any of the company-specific risk be diversified away by investing in both SSgA and DWTR 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 and DWTR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSgA and DWTR, you can compare the effects of market volatilities on SSgA and DWTR 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 with a short position of DWTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA and DWTR.
Diversification Opportunities for SSgA and DWTR
Pay attention - limited upside
The 3 months correlation between SSgA and DWTR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SSgA and DWTR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWTR and 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 SSgA are associated (or correlated) with DWTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWTR has no effect on the direction of SSgA i.e., SSgA and DWTR go up and down completely randomly.
Pair Corralation between SSgA and DWTR
If you would invest (100.00) in DWTR on January 25, 2024 and sell it today you would earn a total of 100.00 from holding DWTR or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSgA vs. DWTR
Performance |
| Timeline |
| SSgA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DWTR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SSgA and DWTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSgA and DWTR
The main advantage of trading using opposite SSgA and DWTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSgA position performs unexpectedly, DWTR 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 DWTR will offset losses from the drop in DWTR's long position.| SSgA vs. Vanguard Total Stock | SSgA vs. SPDR SP 500 | SSgA vs. iShares Core SP | SSgA vs. Vanguard Total Bond |
| DWTR vs. Vanguard Quality Factor | DWTR vs. Vanguard Multifactor | DWTR vs. Vanguard Value Factor | DWTR vs. Vanguard Minimum Volatility |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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