Correlation Between State Farm and Siit Small
Can any of the company-specific risk be diversified away by investing in both State Farm and Siit Small 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 Farm and Siit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Farm Interim and Siit Small Mid, you can compare the effects of market volatilities on State Farm and Siit Small 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 Farm with a short position of Siit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Farm and Siit Small.
Diversification Opportunities for State Farm and Siit Small
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and Siit is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding State Farm Interim and Siit Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Small Mid and State Farm 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 Farm Interim are associated (or correlated) with Siit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Small Mid has no effect on the direction of State Farm i.e., State Farm and Siit Small go up and down completely randomly.
Pair Corralation between State Farm and Siit Small
Assuming the 90 days horizon State Farm Interim is expected to generate 0.14 times more return on investment than Siit Small. However, State Farm Interim is 7.0 times less risky than Siit Small. It trades about 0.17 of its potential returns per unit of risk. Siit Small Mid is currently generating about -0.02 per unit of risk. If you would invest 956.00 in State Farm Interim on September 13, 2024 and sell it today you would earn a total of 4.00 from holding State Farm Interim or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
State Farm Interim vs. Siit Small Mid
Performance |
| Timeline |
| State Farm Interim |
| Siit Small Mid |
State Farm and Siit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Farm and Siit Small
The main advantage of trading using opposite State Farm and Siit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Farm position performs unexpectedly, Siit Small 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 Siit Small will offset losses from the drop in Siit Small's long position.| State Farm vs. Gamco Global Telecommunications | State Farm vs. Franklin High Yield | State Farm vs. Counterpoint Tactical Municipal | State Farm vs. Ab Impact Municipal |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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