Correlation Between Growth Fund and State Street
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and State Street Premier, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and State Street.
Diversification Opportunities for Growth Fund and State Street
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Growth and State is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of 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 Growth Fund 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 Growth Fund Of 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 Growth Fund i.e., Growth Fund and State Street go up and down completely randomly.
Pair Corralation between Growth Fund and State Street
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.83 times more return on investment than State Street. However, Growth Fund Of is 1.21 times less risky than State Street. It trades about 0.35 of its potential returns per unit of risk. State Street Premier is currently generating about 0.22 per unit of risk. If you would invest 6,944 in Growth Fund Of on September 1, 2024 and sell it today you would earn a total of 462.00 from holding Growth Fund Of or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Growth Fund Of vs. State Street Premier
Performance |
| Timeline |
| Growth Fund |
| State Street Premier |
Growth Fund and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and State Street
The main advantage of trading using opposite Growth Fund and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Washington Mutual Investors | Growth Fund vs. Capital World Growth | Growth Fund vs. American Balanced Fund |
| State Street vs. Goldman Sachs Esg | State Street vs. Invesco Gold Special | State Street vs. Gold And Precious | State Street vs. Oppenheimer Gold Special |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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