Correlation Between State Street and Gold Portfolio
Can any of the company-specific risk be diversified away by investing in both State Street and Gold Portfolio 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 Gold Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Target and Gold Portfolio Fidelity, you can compare the effects of market volatilities on State Street and Gold Portfolio 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 Gold Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Gold Portfolio.
Diversification Opportunities for State Street and Gold Portfolio
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between State and GOLD is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target and Gold Portfolio Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Portfolio Fidelity 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 Target are associated (or correlated) with Gold Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Portfolio Fidelity has no effect on the direction of State Street i.e., State Street and Gold Portfolio go up and down completely randomly.
Pair Corralation between State Street and Gold Portfolio
Assuming the 90 days horizon State Street Target is expected to generate 0.29 times more return on investment than Gold Portfolio. However, State Street Target is 3.49 times less risky than Gold Portfolio. It trades about 0.12 of its potential returns per unit of risk. Gold Portfolio Fidelity is currently generating about -0.18 per unit of risk. If you would invest 1,565 in State Street Target on August 29, 2024 and sell it today you would earn a total of 24.00 from holding State Street Target or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Target vs. Gold Portfolio Fidelity
Performance |
| Timeline |
| State Street Target |
| Gold Portfolio Fidelity |
State Street and Gold Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Gold Portfolio
The main advantage of trading using opposite State Street and Gold Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Gold Portfolio 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 Gold Portfolio will offset losses from the drop in Gold Portfolio's long position.| State Street vs. Franklin Gold Precious | State Street vs. The Gold Bullion | State Street vs. Gamco Global Gold | State Street vs. Gold Portfolio Fidelity |
| Gold Portfolio vs. Fundamental Large Cap | Gold Portfolio vs. Qs Large Cap | Gold Portfolio vs. Touchstone Large Cap | Gold Portfolio vs. Tax Managed Large Cap |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |