Correlation Between Pace International and State Street
Can any of the company-specific risk be diversified away by investing in both Pace International 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 Pace International and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and State Street Premier, you can compare the effects of market volatilities on Pace International 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 Pace International with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and State Street.
Diversification Opportunities for Pace International and State Street
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and State is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging 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 Pace International 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 Pace International Emerging 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 Pace International i.e., Pace International and State Street go up and down completely randomly.
Pair Corralation between Pace International and State Street
Assuming the 90 days horizon Pace International Emerging is expected to under-perform the State Street. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pace International Emerging is 1.49 times less risky than State Street. The mutual fund trades about -0.24 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 14,021 in State Street Premier on August 26, 2024 and sell it today you would earn a total of 162.00 from holding State Street Premier or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. State Street Premier
Performance |
| Timeline |
| Pace International |
| State Street Premier |
Pace International and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and State Street
The main advantage of trading using opposite Pace International and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International 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.| Pace International vs. Kinetics Small Cap | Pace International vs. Baird Smallmid Cap | Pace International vs. Small Pany Growth | Pace International vs. Omni Small Cap Value |
| State Street vs. Franklin Emerging Market | State Street vs. Pnc Emerging Markets | State Street vs. Pace International Emerging | State Street vs. Western Assets Emerging |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |