Correlation Between State Street and Ssga International
Can any of the company-specific risk be diversified away by investing in both State Street and Ssga International 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 Ssga International 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 Ssga International Stock, you can compare the effects of market volatilities on State Street and Ssga International 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 Ssga International. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Ssga International.
Diversification Opportunities for State Street and Ssga International
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and Ssga is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding State Street Equity and Ssga International Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssga International Stock 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 Ssga International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssga International Stock has no effect on the direction of State Street i.e., State Street and Ssga International go up and down completely randomly.
Pair Corralation between State Street and Ssga International
Assuming the 90 days horizon State Street is expected to generate 25.28 times less return on investment than Ssga International. In addition to that, State Street is 1.15 times more volatile than Ssga International Stock. It trades about 0.01 of its total potential returns per unit of risk. Ssga International Stock is currently generating about 0.15 per unit of volatility. If you would invest 1,088 in Ssga International Stock on November 27, 2024 and sell it today you would earn a total of 69.00 from holding Ssga International Stock or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Equity vs. Ssga International Stock
Performance |
| Timeline |
| State Street Equity |
| Ssga International Stock |
State Street and Ssga International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Ssga International
The main advantage of trading using opposite State Street and Ssga International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Ssga International 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 Ssga International will offset losses from the drop in Ssga International's long position.| State Street vs. Prudential Core Conservative | State Street vs. Manning Napier Diversified | State Street vs. Lord Abbett Diversified | State Street vs. Massmutual Premier Diversified |
| Ssga International vs. Hennessy Bp Energy | Ssga International vs. World Energy Fund | Ssga International vs. Clearbridge Energy Mlp | Ssga International vs. Gamco Natural Resources |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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