Correlation Between Ab Small and State Street
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and State Street Equity, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and State Street.
Diversification Opportunities for Ab Small and State Street
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SCYVX and State is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and State Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Equity and Ab Small 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 Ab Small Cap 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 Equity has no effect on the direction of Ab Small i.e., Ab Small and State Street go up and down completely randomly.
Pair Corralation between Ab Small and State Street
Assuming the 90 days horizon Ab Small is expected to generate 1.65 times less return on investment than State Street. In addition to that, Ab Small is 1.69 times more volatile than State Street Equity. It trades about 0.06 of its total potential returns per unit of risk. State Street Equity is currently generating about 0.18 per unit of volatility. If you would invest 45,194 in State Street Equity on September 13, 2024 and sell it today you would earn a total of 815.00 from holding State Street Equity or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Small Cap vs. State Street Equity
Performance |
| Timeline |
| Ab Small Cap |
| State Street Equity |
Ab Small and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and State Street
The main advantage of trading using opposite Ab Small and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. American Century Etf | Ab Small vs. Valic Company I | Ab Small vs. Northern Small Cap | Ab Small vs. Small Cap Value Fund |
| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |