Correlation Between Huber Capital and State Street
Can any of the company-specific risk be diversified away by investing in both Huber Capital 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 Huber Capital and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huber Capital Equity and State Street Target, you can compare the effects of market volatilities on Huber Capital 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 Huber Capital with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and State Street.
Diversification Opportunities for Huber Capital and State Street
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huber and State is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Equity 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 Huber Capital 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 Huber Capital Equity 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 Huber Capital i.e., Huber Capital and State Street go up and down completely randomly.
Pair Corralation between Huber Capital and State Street
Assuming the 90 days horizon Huber Capital Equity is expected to generate 1.22 times more return on investment than State Street. However, Huber Capital is 1.22 times more volatile than State Street Target. It trades about 0.09 of its potential returns per unit of risk. State Street Target is currently generating about 0.1 per unit of risk. If you would invest 2,356 in Huber Capital Equity on September 14, 2024 and sell it today you would earn a total of 1,042 from holding Huber Capital Equity or generate 44.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Huber Capital Equity vs. State Street Target
Performance |
| Timeline |
| Huber Capital Equity |
| State Street Target |
Huber Capital and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huber Capital and State Street
The main advantage of trading using opposite Huber Capital and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huber Capital 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.| Huber Capital vs. Huber Capital Equity | Huber Capital vs. Huber Capital Small | Huber Capital vs. Huber Capital Small | Huber Capital vs. Amg Gwk Small |
| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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