Correlation Between Qs Growth and State Farm
Can any of the company-specific risk be diversified away by investing in both Qs Growth and State Farm 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 Qs Growth and State Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qs Growth Fund and State Farm Balanced, you can compare the effects of market volatilities on Qs Growth and State Farm 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 Qs Growth with a short position of State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qs Growth and State Farm.
Diversification Opportunities for Qs Growth and State Farm
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LANIX and State is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Qs Growth Fund and State Farm Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm Balanced and Qs 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 Qs Growth Fund are associated (or correlated) with State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm Balanced has no effect on the direction of Qs Growth i.e., Qs Growth and State Farm go up and down completely randomly.
Pair Corralation between Qs Growth and State Farm
Assuming the 90 days horizon Qs Growth is expected to generate 1.27 times less return on investment than State Farm. In addition to that, Qs Growth is 1.66 times more volatile than State Farm Balanced. It trades about 0.14 of its total potential returns per unit of risk. State Farm Balanced is currently generating about 0.29 per unit of volatility. If you would invest 9,681 in State Farm Balanced on September 13, 2024 and sell it today you would earn a total of 174.00 from holding State Farm Balanced or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Qs Growth Fund vs. State Farm Balanced
Performance |
| Timeline |
| Qs Growth Fund |
| State Farm Balanced |
Qs Growth and State Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qs Growth and State Farm
The main advantage of trading using opposite Qs Growth and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qs Growth position performs unexpectedly, State Farm 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 Farm will offset losses from the drop in State Farm's long position.| Qs Growth vs. Western Asset High | Qs Growth vs. Metropolitan West High | Qs Growth vs. Ppm High Yield | Qs Growth vs. Intal High Relative |
| State Farm vs. Aqr Managed Futures | State Farm vs. Lord Abbett Inflation | State Farm vs. Guggenheim Managed Futures | State Farm vs. Guidepath Managed Futures |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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