Correlation Between SSgA SPDR and VictoryShares Small

Can any of the company-specific risk be diversified away by investing in both SSgA SPDR and VictoryShares Small 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 VictoryShares Small 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 VictoryShares Small Mid, you can compare the effects of market volatilities on SSgA SPDR and VictoryShares Small 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 VictoryShares Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSgA SPDR and VictoryShares Small.

Diversification Opportunities for SSgA SPDR and VictoryShares Small

0.96

Correlation Coefficient

SSgA SPDR  VictoryShares Small

Almost no diversification

The 3 months correlation between SSgA and VictoryShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and VictoryShares Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Small Mid 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 VictoryShares Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Small Mid has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and VictoryShares Small go up and down completely randomly.

Pair Corralation between SSgA SPDR and VictoryShares Small

Assuming the 90 days horizon SSgA SPDR ETFs is expected to generate 1.06 times more return on investment than VictoryShares Small. However, SSgA SPDR is 1.06 times more volatile than VictoryShares Small Mid. It trades about 0.15 of its potential returns per unit of risk. VictoryShares Small Mid is currently generating about 0.15 per unit of risk. If you would invest  8,886  in SSgA SPDR ETFs on May 1, 2025 and sell it today you would earn a total of  925.00  from holding SSgA SPDR ETFs or generate 10.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SSgA SPDR ETFs  vs.  VictoryShares Small Mid

SSgA SPDR ETFs

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR ETFs are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SSgA SPDR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

VictoryShares Small Mid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares Small Mid are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, VictoryShares Small may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SSgA SPDR and VictoryShares Small

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

The idea behind SSgA SPDR ETFs and VictoryShares Small Mid 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.