Correlation Between State Farm and State Farm
Can any of the company-specific risk be diversified away by investing in both State Farm and State Farm 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 State Farm 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 State Farm Balanced, you can compare the effects of market volatilities on State Farm and State Farm 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 State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Farm and State Farm.
Diversification Opportunities for State Farm and State Farm
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and State is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding State Farm Interim and State Farm Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm Balanced 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 State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm Balanced has no effect on the direction of State Farm i.e., State Farm and State Farm go up and down completely randomly.
Pair Corralation between State Farm and State Farm
Assuming the 90 days horizon State Farm is expected to generate 821.0 times less return on investment than State Farm. But when comparing it to its historical volatility, State Farm Interim is 3.39 times less risky than State Farm. It trades about 0.0 of its potential returns per unit of risk. State Farm Balanced is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 9,643 in State Farm Balanced on August 29, 2024 and sell it today you would earn a total of 181.00 from holding State Farm Balanced or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Farm Interim vs. State Farm Balanced
Performance |
| Timeline |
| State Farm Interim |
| State Farm Balanced |
State Farm and State Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Farm and State Farm
The main advantage of trading using opposite State Farm and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Farm position performs unexpectedly, State Farm 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 Farm will offset losses from the drop in State Farm's long position.| State Farm vs. Maryland Tax Free Bond | State Farm vs. Mirova Global Green | State Farm vs. Rbc Bluebay Global | State Farm vs. Nebraska Municipal Fund |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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