Correlation Between State Street and Blackrock Small
Can any of the company-specific risk be diversified away by investing in both State Street and Blackrock Small 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 Blackrock Small 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 Blackrock Small Cap, you can compare the effects of market volatilities on State Street and Blackrock Small 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 Blackrock Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Blackrock Small.
Diversification Opportunities for State Street and Blackrock Small
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between State and Blackrock is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding State Street Equity and Blackrock Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Small Cap 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 Blackrock Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Small Cap has no effect on the direction of State Street i.e., State Street and Blackrock Small go up and down completely randomly.
Pair Corralation between State Street and Blackrock Small
Assuming the 90 days horizon State Street Equity is expected to generate 0.62 times more return on investment than Blackrock Small. However, State Street Equity is 1.61 times less risky than Blackrock Small. It trades about 0.13 of its potential returns per unit of risk. Blackrock Small Cap is currently generating about 0.06 per unit of risk. If you would invest 31,831 in State Street Equity on August 31, 2024 and sell it today you would earn a total of 13,586 from holding State Street Equity or generate 42.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Equity vs. Blackrock Small Cap
Performance |
| Timeline |
| State Street Equity |
| Blackrock Small Cap |
State Street and Blackrock Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Blackrock Small
The main advantage of trading using opposite State Street and Blackrock Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Blackrock Small 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 Blackrock Small will offset losses from the drop in Blackrock Small's long position.| State Street vs. Ab All Market | State Street vs. Ep Emerging Markets | State Street vs. Origin Emerging Markets | State Street vs. Aqr Long Short Equity |
| Blackrock Small vs. Small Midcap Dividend Income | Blackrock Small vs. L Abbett Growth | Blackrock Small vs. Victory Rs Small | Blackrock Small vs. Ab Small 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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