Correlation Between State Street and State Street
Can any of the company-specific risk be diversified away by investing in both State Street 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 State Street and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Equity and State Street Target, you can compare the effects of market volatilities on State Street 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 State Street with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and State Street.
Diversification Opportunities for State Street and State Street
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and State is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding State Street Equity and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 Equity 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 Target has no effect on the direction of State Street i.e., State Street and State Street go up and down completely randomly.
Pair Corralation between State Street and State Street
Assuming the 90 days horizon State Street Equity is expected to generate 1.81 times more return on investment than State Street. However, State Street is 1.81 times more volatile than State Street Target. It trades about 0.15 of its potential returns per unit of risk. State Street Target is currently generating about -0.01 per unit of risk. If you would invest 52,876 in State Street Equity on August 29, 2024 and sell it today you would earn a total of 2,486 from holding State Street Equity or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Equity vs. State Street Target
Performance |
| Timeline |
| State Street Equity |
| State Street Target |
State Street and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and State Street
The main advantage of trading using opposite State Street and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street 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.| State Street vs. Hennessy Technology Fund | State Street vs. Firsthand Technology Opportunities | State Street vs. Blackrock Science Technology | State Street vs. Mfs Technology Fund |
| State Street vs. Commodities Strategy Fund | State Street vs. Touchstone Sands Capital | State Street vs. Barings Emerging Markets | State Street vs. T Rowe Price |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |