Correlation Between State Street and Gaztransport
Can any of the company-specific risk be diversified away by investing in both State Street and Gaztransport 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 State Street and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Corp and Gaztransport et Technigaz, you can compare the effects of market volatilities on State Street and Gaztransport 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 State Street with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Gaztransport.
Diversification Opportunities for State Street and Gaztransport
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and Gaztransport is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and State Street 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 State Street Corp are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of State Street i.e., State Street and Gaztransport go up and down completely randomly.
Pair Corralation between State Street and Gaztransport
Assuming the 90 days trading horizon State Street Corp is expected to generate 0.87 times more return on investment than Gaztransport. However, State Street Corp is 1.15 times less risky than Gaztransport. It trades about 0.17 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.03 per unit of risk. If you would invest 7,304 in State Street Corp on September 3, 2024 and sell it today you would earn a total of 2,515 from holding State Street Corp or generate 34.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Corp vs. Gaztransport et Technigaz
Performance |
| Timeline |
| State Street Corp |
| Gaztransport et Technigaz |
State Street and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Gaztransport
The main advantage of trading using opposite State Street and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| State Street vs. Wheaton Precious Metals | State Street vs. Jacquet Metal Service | State Street vs. European Metals Holdings | State Street vs. Future Metals NL |
| Gaztransport vs. Cairo Communication SpA | Gaztransport vs. Lundin Mining Corp | Gaztransport vs. Zegona Communications Plc | Gaztransport vs. Greenroc Mining PLC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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