Correlation Between Locorr Longshort and State Street
Can any of the company-specific risk be diversified away by investing in both Locorr Longshort 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 Locorr Longshort and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Longshort Modities and State Street Premier, you can compare the effects of market volatilities on Locorr Longshort 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 Locorr Longshort with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Longshort and State Street.
Diversification Opportunities for Locorr Longshort and State Street
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Locorr and State is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Longshort Modities and State Street Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Premier and Locorr Longshort 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 Locorr Longshort Modities 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 Premier has no effect on the direction of Locorr Longshort i.e., Locorr Longshort and State Street go up and down completely randomly.
Pair Corralation between Locorr Longshort and State Street
Assuming the 90 days horizon Locorr Longshort Modities is expected to under-perform the State Street. But the mutual fund apears to be less risky and, when comparing its historical volatility, Locorr Longshort Modities is 4.16 times less risky than State Street. The mutual fund trades about -0.2 of its potential returns per unit of risk. The State Street Premier is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 14,034 in State Street Premier on August 27, 2024 and sell it today you would earn a total of 149.00 from holding State Street Premier or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Longshort Modities vs. State Street Premier
Performance |
| Timeline |
| Locorr Longshort Modities |
| State Street Premier |
Locorr Longshort and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Longshort and State Street
The main advantage of trading using opposite Locorr Longshort and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Longshort 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.| Locorr Longshort vs. Locorr Market Trend | Locorr Longshort vs. Locorr Market Trend | Locorr Longshort vs. Locorr Market Trend | Locorr Longshort vs. Locorr Spectrum Income |
| State Street vs. Locorr Longshort Modities | State Street vs. Ultra Short Term Fixed | State Street vs. Barings Active Short | State Street vs. Angel Oak Ultrashort |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |