Correlation Between California High and State Street
Can any of the company-specific risk be diversified away by investing in both California High 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 California High and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California High Yield Municipal and State Street Target, you can compare the effects of market volatilities on California High 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 California High with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of California High and State Street.
Diversification Opportunities for California High and State Street
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between California and State is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding California High Yield Municipa and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target and California High 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 California High Yield Municipal 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 Target has no effect on the direction of California High i.e., California High and State Street go up and down completely randomly.
Pair Corralation between California High and State Street
Assuming the 90 days horizon California High Yield Municipal is expected to generate 0.28 times more return on investment than State Street. However, California High Yield Municipal is 3.63 times less risky than State Street. It trades about 0.46 of its potential returns per unit of risk. State Street Target is currently generating about 0.04 per unit of risk. If you would invest 983.00 in California High Yield Municipal on September 12, 2024 and sell it today you would earn a total of 13.00 from holding California High Yield Municipal or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California High Yield Municipa vs. State Street Target
Performance |
| Timeline |
| California High Yield |
| State Street Target |
California High and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California High and State Street
The main advantage of trading using opposite California High and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California High 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.| California High vs. T Rowe Price | California High vs. Bbh Intermediate Municipal | California High vs. Ab Bond Inflation | California High vs. Blrc Sgy Mnp |
| State Street vs. Artisan Thematic Fund | State Street vs. T Rowe Price | State Street vs. Rbb Fund | State Street vs. Commonwealth Global Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |