Correlation Between State Street and Fidelity Sai
Can any of the company-specific risk be diversified away by investing in both State Street and Fidelity Sai 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 Fidelity Sai 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 Fidelity Sai Convertible, you can compare the effects of market volatilities on State Street and Fidelity Sai 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 Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Fidelity Sai.
Diversification Opportunities for State Street and Fidelity Sai
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between State and Fidelity is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding State Street Equity and Fidelity Sai Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Convertible 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 Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Convertible has no effect on the direction of State Street i.e., State Street and Fidelity Sai go up and down completely randomly.
Pair Corralation between State Street and Fidelity Sai
Assuming the 90 days horizon State Street Equity is expected to generate 9.0 times more return on investment than Fidelity Sai. However, State Street is 9.0 times more volatile than Fidelity Sai Convertible. It trades about 0.08 of its potential returns per unit of risk. Fidelity Sai Convertible is currently generating about 0.43 per unit of risk. If you would invest 41,205 in State Street Equity on October 21, 2024 and sell it today you would earn a total of 3,503 from holding State Street Equity or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Equity vs. Fidelity Sai Convertible
Performance |
| Timeline |
| State Street Equity |
| Fidelity Sai Convertible |
State Street and Fidelity Sai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Fidelity Sai
The main advantage of trading using opposite State Street and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Fidelity Sai 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 Fidelity Sai will offset losses from the drop in Fidelity Sai's long position.| State Street vs. Rbc Small Cap | State Street vs. Praxis Small Cap | State Street vs. Needham Small Cap | State Street vs. Tax Managed Mid Small |
| Fidelity Sai vs. Blackrock Large Cap | Fidelity Sai vs. Fundamental Large Cap | Fidelity Sai vs. Profunds Large Cap Growth | Fidelity Sai vs. Smead Value Fund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |