Correlation Between STORE ELECTRONIC and State Bank
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and State Bank 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 STORE ELECTRONIC and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and State Bank of, you can compare the effects of market volatilities on STORE ELECTRONIC and State Bank 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 STORE ELECTRONIC with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and State Bank.
Diversification Opportunities for STORE ELECTRONIC and State Bank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STORE and State is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and State Bank go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and State Bank
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 1.85 times more return on investment than State Bank. However, STORE ELECTRONIC is 1.85 times more volatile than State Bank of. It trades about 0.16 of its potential returns per unit of risk. State Bank of is currently generating about 0.15 per unit of risk. If you would invest 13,790 in STORE ELECTRONIC on September 22, 2024 and sell it today you would earn a total of 1,420 from holding STORE ELECTRONIC or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. State Bank of
Performance |
| Timeline |
| STORE ELECTRONIC |
| State Bank |
STORE ELECTRONIC and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and State Bank
The main advantage of trading using opposite STORE ELECTRONIC and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, State Bank 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 Bank will offset losses from the drop in State Bank's long position.| STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc |
| State Bank vs. INVITATION HOMES DL | State Bank vs. Richardson Electronics | State Bank vs. AOI Electronics Co | State Bank vs. STORE ELECTRONIC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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