Correlation Between Ellsworth Growth and State Street
Can any of the company-specific risk be diversified away by investing in both Ellsworth Growth 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 Ellsworth Growth and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellsworth Growth and and State Street, you can compare the effects of market volatilities on Ellsworth Growth 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 Ellsworth Growth with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellsworth Growth and State Street.
Diversification Opportunities for Ellsworth Growth and State Street
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ellsworth and State is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ellsworth Growth and and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street and Ellsworth Growth 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 Ellsworth Growth and 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 Ellsworth Growth i.e., Ellsworth Growth and State Street go up and down completely randomly.
Pair Corralation between Ellsworth Growth and State Street
Assuming the 90 days trading horizon Ellsworth Growth and is expected to under-perform the State Street. In addition to that, Ellsworth Growth is 1.97 times more volatile than State Street. It trades about -0.25 of its total potential returns per unit of risk. State Street is currently generating about -0.1 per unit of volatility. If you would invest 2,488 in State Street on August 24, 2024 and sell it today you would lose (23.00) from holding State Street or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellsworth Growth and vs. State Street
Performance |
| Timeline |
| Ellsworth Growth |
| State Street |
Ellsworth Growth and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellsworth Growth and State Street
The main advantage of trading using opposite Ellsworth Growth and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellsworth Growth 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.| Ellsworth Growth vs. Bancroft Fund | Ellsworth Growth vs. GAMCO Natural Resources | Ellsworth Growth vs. The Gabelli Multimedia | Ellsworth Growth vs. GAMCO Global Gold |
| State Street vs. The Gabelli Equity | State Street vs. The Gabelli Multimedia | State Street vs. The Gabelli Equity | State Street vs. Virtus AllianzGI Convertible |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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