Correlation Between Ep Emerging and State Street
Can any of the company-specific risk be diversified away by investing in both Ep Emerging 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 Ep Emerging and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and State Street Core, you can compare the effects of market volatilities on Ep Emerging 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 Ep Emerging with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and State Street.
Diversification Opportunities for Ep Emerging and State Street
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EPASX and State is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and State Street Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Core and Ep Emerging 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 Ep Emerging Markets 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 Core has no effect on the direction of Ep Emerging i.e., Ep Emerging and State Street go up and down completely randomly.
Pair Corralation between Ep Emerging and State Street
Assuming the 90 days horizon Ep Emerging Markets is expected to under-perform the State Street. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ep Emerging Markets is 1.0 times less risky than State Street. The mutual fund trades about -0.26 of its potential returns per unit of risk. The State Street Core is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8,549 in State Street Core on August 29, 2024 and sell it today you would earn a total of 231.00 from holding State Street Core or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ep Emerging Markets vs. State Street Core
Performance |
| Timeline |
| Ep Emerging Markets |
| State Street Core |
Ep Emerging and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and State Street
The main advantage of trading using opposite Ep Emerging and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging 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.| Ep Emerging vs. Baird Smallmid Cap | Ep Emerging vs. Ab Small Cap | Ep Emerging vs. Small Pany Growth | Ep Emerging vs. Artisan Small Cap |
| State Street vs. Jhancock Diversified Macro | State Street vs. Massmutual Premier Diversified | State Street vs. Vanguard Strategic Small Cap | State Street vs. T Rowe Price |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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