Correlation Between State Street and DTN
Can any of the company-specific risk be diversified away by investing in both State Street and DTN 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 State Street and DTN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street and DTN, you can compare the effects of market volatilities on State Street and DTN 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 State Street with a short position of DTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and DTN.
Diversification Opportunities for State Street and DTN
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and DTN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Street and DTN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTN and State Street 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 State Street are associated (or correlated) with DTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTN has no effect on the direction of State Street i.e., State Street and DTN go up and down completely randomly.
Pair Corralation between State Street and DTN
If you would invest (100.00) in DTN on September 2, 2024 and sell it today you would earn a total of 100.00 from holding DTN or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street vs. DTN
Performance |
| Timeline |
| State Street |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DTN |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
State Street and DTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and DTN
The main advantage of trading using opposite State Street and DTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, DTN 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 DTN will offset losses from the drop in DTN's long position.| State Street vs. FT Vest Equity | State Street vs. Zillow Group Class | State Street vs. Northern Lights | State Street vs. VanEck Vectors Moodys |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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