Correlation Between Verizon Communications and SPDR SSGA

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

By analyzing existing cross correlation between Verizon Communications and SPDR SSGA My2032, you can compare the effects of market volatilities on Verizon Communications and SPDR SSGA 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 Verizon Communications with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and SPDR SSGA.

Diversification Opportunities for Verizon Communications and SPDR SSGA

-0.28

Correlation Coefficient

Verizon Communications  SPDR SSGA

Very good diversification

The 3 months correlation between Verizon and SPDR is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and SPDR SSGA My2032 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2032 and Verizon Communications 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 Verizon Communications are associated (or correlated) with SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA My2032 has no effect on the direction of Verizon Communications i.e., Verizon Communications and SPDR SSGA go up and down completely randomly.

Pair Corralation between Verizon Communications and SPDR SSGA

Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 8.03 times less return on investment than SPDR SSGA. In addition to that, Verizon Communications is 3.79 times more volatile than SPDR SSGA My2032. It trades about 0.01 of its total potential returns per unit of risk. SPDR SSGA My2032 is currently generating about 0.19 per unit of volatility. If you would invest  2,393  in SPDR SSGA My2032 on May 3, 2025 and sell it today you would earn a total of  83.00  from holding SPDR SSGA My2032 or generate 3.47% return on investment over 90 days.

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

Verizon Communications  vs.  SPDR SSGA My2032

Verizon Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verizon Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Verizon Communications is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

SPDR SSGA My2032

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA My2032 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, SPDR SSGA is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Verizon Communications and SPDR SSGA

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

The idea behind Verizon Communications and SPDR SSGA My2032 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.