Correlation Between SSgA SPDR and Norman Broadbent

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

Diversification Opportunities for SSgA SPDR and Norman Broadbent

0.82

Correlation Coefficient

SSgA SPDR  Norman Broadbent

Very poor diversification

The 3 months correlation between SSgA and Norman is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SSgA SPDR ETFs and Norman Broadbent Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norman Broadbent Plc 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 Norman Broadbent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norman Broadbent Plc has no effect on the direction of SSgA SPDR i.e., SSgA SPDR and Norman Broadbent go up and down completely randomly.

Pair Corralation between SSgA SPDR and Norman Broadbent

Assuming the 90 days trading horizon SSgA SPDR is expected to generate 7.4 times less return on investment than Norman Broadbent. But when comparing it to its historical volatility, SSgA SPDR ETFs is 9.79 times less risky than Norman Broadbent. It trades about 0.28 of its potential returns per unit of risk. Norman Broadbent Plc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  9,100  in Norman Broadbent Plc on April 24, 2025 and sell it today you would earn a total of  10,400  from holding Norman Broadbent Plc or generate 114.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

SSgA SPDR ETFs  vs.  Norman Broadbent Plc

SSgA SPDR ETFs

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR ETFs are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SSgA SPDR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Norman Broadbent Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Norman Broadbent Plc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Norman Broadbent exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SSgA SPDR and Norman Broadbent

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

The idea behind SSgA SPDR ETFs and Norman Broadbent Plc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.