Correlation Between Transamerica Financial and State Street
Can any of the company-specific risk be diversified away by investing in both Transamerica Financial 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 Transamerica Financial and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Financial Life and State Street Master, you can compare the effects of market volatilities on Transamerica Financial 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 Transamerica Financial with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Financial and State Street.
Diversification Opportunities for Transamerica Financial and State Street
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transamerica and State is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Financial Life and State Street Master in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Master and Transamerica Financial 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 Transamerica Financial Life 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 Master has no effect on the direction of Transamerica Financial i.e., Transamerica Financial and State Street go up and down completely randomly.
Pair Corralation between Transamerica Financial and State Street
If you would invest 1,177 in Transamerica Financial Life on August 30, 2024 and sell it today you would earn a total of 67.00 from holding Transamerica Financial Life or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Financial Life vs. State Street Master
Performance |
| Timeline |
| Transamerica Financial |
| State Street Master |
Transamerica Financial and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Financial and State Street
The main advantage of trading using opposite Transamerica Financial and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Financial 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.| Transamerica Financial vs. Vanguard Mid Cap Value | Transamerica Financial vs. HUMANA INC | Transamerica Financial vs. Aquagold International | Transamerica Financial vs. Barloworld Ltd ADR |
| State Street vs. Calvert High Yield | State Street vs. American Century High | State Street vs. Ppm High Yield | State Street vs. Gmo High Yield |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |