Correlation Between State Bank and WINMARK
Can any of the company-specific risk be diversified away by investing in both State Bank and WINMARK 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 Bank and WINMARK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and WINMARK, you can compare the effects of market volatilities on State Bank and WINMARK 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 Bank with a short position of WINMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and WINMARK.
Diversification Opportunities for State Bank and WINMARK
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and WINMARK is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and WINMARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINMARK and State Bank 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 Bank of are associated (or correlated) with WINMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINMARK has no effect on the direction of State Bank i.e., State Bank and WINMARK go up and down completely randomly.
Pair Corralation between State Bank and WINMARK
Assuming the 90 days horizon State Bank of is expected to generate 0.97 times more return on investment than WINMARK. However, State Bank of is 1.03 times less risky than WINMARK. It trades about 0.08 of its potential returns per unit of risk. WINMARK is currently generating about 0.0 per unit of risk. If you would invest 6,675 in State Bank of on September 4, 2024 and sell it today you would earn a total of 2,675 from holding State Bank of or generate 40.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
State Bank of vs. WINMARK
Performance |
| Timeline |
| State Bank |
| WINMARK |
State Bank and WINMARK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and WINMARK
The main advantage of trading using opposite State Bank and WINMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, WINMARK 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 WINMARK will offset losses from the drop in WINMARK's long position.| State Bank vs. Ming Le Sports | State Bank vs. United Breweries Co | State Bank vs. VIAPLAY GROUP AB | State Bank vs. Thai Beverage Public |
| WINMARK vs. Alaska Air Group | WINMARK vs. NORWEGIAN AIR SHUT | WINMARK vs. BROADSTNET LEADL 00025 | WINMARK vs. Transportadora de Gas |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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