Correlation Between State Street and Us Global
Can any of the company-specific risk be diversified away by investing in both State Street and Us Global 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 Us Global 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 Us Global Investors, you can compare the effects of market volatilities on State Street and Us Global 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 Us Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Us Global.
Diversification Opportunities for State Street and Us Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and USLUX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding State Street Equity and Us Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Global Investors 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 Us Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Global Investors has no effect on the direction of State Street i.e., State Street and Us Global go up and down completely randomly.
Pair Corralation between State Street and Us Global
Assuming the 90 days horizon State Street Equity is expected to generate 0.94 times more return on investment than Us Global. However, State Street Equity is 1.07 times less risky than Us Global. It trades about 0.36 of its potential returns per unit of risk. Us Global Investors is currently generating about 0.14 per unit of risk. If you would invest 52,397 in State Street Equity on September 1, 2024 and sell it today you would earn a total of 3,073 from holding State Street Equity or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
State Street Equity vs. Us Global Investors
Performance |
| Timeline |
| State Street Equity |
| Us Global Investors |
State Street and Us Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Us Global
The main advantage of trading using opposite State Street and Us Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Us Global 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 Us Global will offset losses from the drop in Us Global's long position.| State Street vs. Us Global Investors | State Street vs. Kinetics Global Fund | State Street vs. Blue Current Global | State Street vs. Pimco Global Multi Asset |
| Us Global vs. Jpmorgan Small Cap | Us Global vs. Kinetics Small Cap | Us Global vs. Small Midcap Dividend Income | Us Global vs. Small Pany Growth |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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