Correlation Between Ecclesiastical Insurance and State Street
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance 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 Ecclesiastical Insurance and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and State Street Corp, you can compare the effects of market volatilities on Ecclesiastical Insurance 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 Ecclesiastical Insurance with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and State Street.
Diversification Opportunities for Ecclesiastical Insurance and State Street
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecclesiastical and State is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and State Street Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Corp and Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Corp has no effect on the direction of Ecclesiastical Insurance i.e., Ecclesiastical Insurance and State Street go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and State Street
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to under-perform the State Street. But the stock apears to be less risky and, when comparing its historical volatility, Ecclesiastical Insurance Office is 1.5 times less risky than State Street. The stock trades about -0.01 of its potential returns per unit of risk. The State Street Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 8,612 in State Street Corp on September 2, 2024 and sell it today you would earn a total of 1,308 from holding State Street Corp or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. State Street Corp
Performance |
| Timeline |
| Ecclesiastical Insurance |
| State Street Corp |
Ecclesiastical Insurance and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and State Street
The main advantage of trading using opposite Ecclesiastical Insurance and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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.| Ecclesiastical Insurance vs. Toyota Motor Corp | Ecclesiastical Insurance vs. SoftBank Group Corp | Ecclesiastical Insurance vs. Fannie Mae | Ecclesiastical Insurance vs. Apple Inc |
| State Street vs. Tatton Asset Management | State Street vs. Spirent Communications plc | State Street vs. Martin Marietta Materials | State Street vs. Aeorema Communications 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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