Correlation Between State Street and Gabelli Gold
Can any of the company-specific risk be diversified away by investing in both State Street and Gabelli Gold 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 Gabelli Gold 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 Gabelli Gold Fund, you can compare the effects of market volatilities on State Street and Gabelli Gold 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 Gabelli Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Gabelli Gold.
Diversification Opportunities for State Street and Gabelli Gold
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between State and Gabelli is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold 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 Gabelli Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Gold has no effect on the direction of State Street i.e., State Street and Gabelli Gold go up and down completely randomly.
Pair Corralation between State Street and Gabelli Gold
Assuming the 90 days horizon State Street Target is expected to generate 0.27 times more return on investment than Gabelli Gold. However, State Street Target is 3.69 times less risky than Gabelli Gold. It trades about 0.33 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about -0.15 per unit of risk. If you would invest 1,541 in State Street Target on September 1, 2024 and sell it today you would earn a total of 58.00 from holding State Street Target or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
State Street Target vs. Gabelli Gold Fund
Performance |
| Timeline |
| State Street Target |
| Gabelli Gold |
State Street and Gabelli Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Gabelli Gold
The main advantage of trading using opposite State Street and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Gabelli Gold 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 Gabelli Gold will offset losses from the drop in Gabelli Gold's long position.| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
| Gabelli Gold vs. Legg Mason Bw | Gabelli Gold vs. American Mutual Fund | Gabelli Gold vs. Transamerica Large Cap | Gabelli Gold vs. Fundamental 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |