Correlation Between TINC Comm and State Street
Can any of the company-specific risk be diversified away by investing in both TINC Comm and State Street 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 TINC Comm and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TINC Comm VA and State Street, you can compare the effects of market volatilities on TINC Comm and State Street 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 TINC Comm with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of TINC Comm and State Street.
Diversification Opportunities for TINC Comm and State Street
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TINC and State is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding TINC Comm VA and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street and TINC Comm 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 TINC Comm VA are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of TINC Comm i.e., TINC Comm and State Street go up and down completely randomly.
Pair Corralation between TINC Comm and State Street
Assuming the 90 days horizon TINC Comm VA is expected to under-perform the State Street. But the stock apears to be less risky and, when comparing its historical volatility, TINC Comm VA is 1.64 times less risky than State Street. The stock trades about -0.01 of its potential returns per unit of risk. The State Street is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,834 in State Street on September 12, 2024 and sell it today you would earn a total of 2,558 from holding State Street or generate 37.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TINC Comm VA vs. State Street
Performance |
| Timeline |
| TINC Comm VA |
| State Street |
TINC Comm and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TINC Comm and State Street
The main advantage of trading using opposite TINC Comm and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TINC Comm position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| TINC Comm vs. Tyson Foods | TINC Comm vs. THAI BEVERAGE | TINC Comm vs. Collins Foods Limited | TINC Comm vs. PREMIER FOODS |
| State Street vs. TAL Education Group | State Street vs. EMBARK EDUCATION LTD | State Street vs. Solstad Offshore ASA | State Street vs. SBM OFFSHORE |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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