Correlation Between Superior Plus and State Street
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and State Street, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and State Street.
Diversification Opportunities for Superior Plus and State Street
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and State is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and State Street go up and down completely randomly.
Pair Corralation between Superior Plus and State Street
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the State Street. In addition to that, Superior Plus is 1.46 times more volatile than State Street. It trades about -0.03 of its total potential returns per unit of risk. State Street is currently generating about 0.07 per unit of volatility. If you would invest 6,539 in State Street on August 31, 2024 and sell it today you would earn a total of 2,801 from holding State Street or generate 42.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. State Street
Performance |
| Timeline |
| Superior Plus Corp |
| State Street |
Superior Plus and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and State Street
The main advantage of trading using opposite Superior Plus and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. BROADSTNET LEADL 00025 | Superior Plus vs. Mitsubishi Materials | Superior Plus vs. Martin Marietta Materials | Superior Plus vs. Summit Materials |
| State Street vs. Ameriprise Financial | State Street vs. Ares Management Corp | State Street vs. Superior Plus Corp | State Street vs. NMI Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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