Correlation Between Ssga International and State Street
Can any of the company-specific risk be diversified away by investing in both Ssga International 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 Ssga International and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssga International Stock and State Street Smallmid, you can compare the effects of market volatilities on Ssga International 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 Ssga International with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssga International and State Street.
Diversification Opportunities for Ssga International and State Street
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ssga and State is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ssga International Stock and State Street Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Smallmid and Ssga International 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 Ssga International Stock 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 Smallmid has no effect on the direction of Ssga International i.e., Ssga International and State Street go up and down completely randomly.
Pair Corralation between Ssga International and State Street
Assuming the 90 days horizon Ssga International Stock is expected to under-perform the State Street. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ssga International Stock is 1.91 times less risky than State Street. The mutual fund trades about -0.12 of its potential returns per unit of risk. The State Street Smallmid is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 30,197 in State Street Smallmid on August 28, 2024 and sell it today you would earn a total of 3,231 from holding State Street Smallmid or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssga International Stock vs. State Street Smallmid
Performance |
| Timeline |
| Ssga International Stock |
| State Street Smallmid |
Ssga International and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssga International and State Street
The main advantage of trading using opposite Ssga International and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssga International 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.| Ssga International vs. State Street Target | Ssga International vs. State Street Target | Ssga International vs. State Street Target | Ssga International vs. State Street Aggregate |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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