Correlation Between State Street and Spire Healthcare
Can any of the company-specific risk be diversified away by investing in both State Street and Spire Healthcare 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 Spire Healthcare 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 Spire Healthcare Group, you can compare the effects of market volatilities on State Street and Spire Healthcare 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 Spire Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Spire Healthcare.
Diversification Opportunities for State Street and Spire Healthcare
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and Spire is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and Spire Healthcare Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spire Healthcare 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 Spire Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spire Healthcare has no effect on the direction of State Street i.e., State Street and Spire Healthcare go up and down completely randomly.
Pair Corralation between State Street and Spire Healthcare
Assuming the 90 days trading horizon State Street Corp is expected to generate 1.18 times more return on investment than Spire Healthcare. However, State Street is 1.18 times more volatile than Spire Healthcare Group. It trades about 0.17 of its potential returns per unit of risk. Spire Healthcare Group is currently generating about -0.07 per unit of risk. If you would invest 7,359 in State Street Corp on September 5, 2024 and sell it today you would earn a total of 2,463 from holding State Street Corp or generate 33.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Corp vs. Spire Healthcare Group
Performance |
| Timeline |
| State Street Corp |
| Spire Healthcare |
State Street and Spire Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Spire Healthcare
The main advantage of trading using opposite State Street and Spire Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Spire Healthcare 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 Spire Healthcare will offset losses from the drop in Spire Healthcare's long position.| State Street vs. Spire Healthcare Group | State Street vs. Naturhouse Health SA | State Street vs. Norman Broadbent Plc | State Street vs. Compagnie Plastic Omnium |
| Spire Healthcare vs. Uniper SE | Spire Healthcare vs. Mulberry Group PLC | Spire Healthcare vs. London Security Plc | Spire Healthcare vs. Triad Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |