Correlation Between Pender Real and Ssga International

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

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

Diversification Opportunities for Pender Real and Ssga International

-0.86

Correlation Coefficient

Pender Real  Ssga International

Pay attention - limited upside

The 3 months correlation between Pender and Ssga is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate and Ssga International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga International Stock and Pender Real 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 Pender Real Estate are associated (or correlated) with Ssga International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga International Stock has no effect on the direction of Pender Real i.e., Pender Real and Ssga International go up and down completely randomly.

Pair Corralation between Pender Real and Ssga International

Assuming the 90 days horizon Pender Real is expected to generate 150.0 times less return on investment than Ssga International. But when comparing it to its historical volatility, Pender Real Estate is 4.87 times less risky than Ssga International. It trades about 0.0 of its potential returns per unit of risk. Ssga International Stock is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,124  in Ssga International Stock on September 27, 2024 and sell it today you would earn a total of  3.00  from holding Ssga International Stock or generate 0.27% return on investment over 90 days.

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

Pender Real Estate  vs.  Ssga International Stock

Pender Real Estate

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pender Real Estate are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pender Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Pender Real and Ssga International

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

The idea behind Pender Real Estate and Ssga International Stock 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.