Correlation Between State Street and Clarkston Fund
Can any of the company-specific risk be diversified away by investing in both State Street and Clarkston Fund 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 Street and Clarkston Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Premier and Clarkston Fund Institutional, you can compare the effects of market volatilities on State Street and Clarkston Fund 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 Street with a short position of Clarkston Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Clarkston Fund.
Diversification Opportunities for State Street and Clarkston Fund
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Clarkston is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding State Street Premier and Clarkston Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkston Fund Insti and State Street 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 Street Premier are associated (or correlated) with Clarkston Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkston Fund Insti has no effect on the direction of State Street i.e., State Street and Clarkston Fund go up and down completely randomly.
Pair Corralation between State Street and Clarkston Fund
Assuming the 90 days horizon State Street Premier is expected to generate 1.71 times more return on investment than Clarkston Fund. However, State Street is 1.71 times more volatile than Clarkston Fund Institutional. It trades about 0.09 of its potential returns per unit of risk. Clarkston Fund Institutional is currently generating about 0.1 per unit of risk. If you would invest 12,712 in State Street Premier on September 1, 2024 and sell it today you would earn a total of 1,651 from holding State Street Premier or generate 12.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Premier vs. Clarkston Fund Institutional
Performance |
| Timeline |
| State Street Premier |
| Clarkston Fund Insti |
State Street and Clarkston Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Clarkston Fund
The main advantage of trading using opposite State Street and Clarkston Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Clarkston Fund 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 Clarkston Fund will offset losses from the drop in Clarkston Fund's long position.| State Street vs. Goldman Sachs Esg | State Street vs. Invesco Gold Special | State Street vs. Gold And Precious | State Street vs. Oppenheimer Gold Special |
| Clarkston Fund vs. Clarkston Partners Fund | Clarkston Fund vs. Clarkston Founders Fund | Clarkston Fund vs. Columbia Acorn International | Clarkston Fund vs. Clarkston Partners Fund |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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