Correlation Between State Farm and Delaware Limited-term
Can any of the company-specific risk be diversified away by investing in both State Farm and Delaware Limited-term 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 Farm and Delaware Limited-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Farm Balanced and Delaware Limited Term Diversified, you can compare the effects of market volatilities on State Farm and Delaware Limited-term 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 Farm with a short position of Delaware Limited-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Farm and Delaware Limited-term.
Diversification Opportunities for State Farm and Delaware Limited-term
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and Delaware is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding State Farm Balanced and Delaware Limited Term Diversif in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Limited Term and State Farm 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 Farm Balanced are associated (or correlated) with Delaware Limited-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Limited Term has no effect on the direction of State Farm i.e., State Farm and Delaware Limited-term go up and down completely randomly.
Pair Corralation between State Farm and Delaware Limited-term
Assuming the 90 days horizon State Farm Balanced is expected to generate 4.37 times more return on investment than Delaware Limited-term. However, State Farm is 4.37 times more volatile than Delaware Limited Term Diversified. It trades about 0.16 of its potential returns per unit of risk. Delaware Limited Term Diversified is currently generating about 0.1 per unit of risk. If you would invest 9,643 in State Farm Balanced on August 30, 2024 and sell it today you would earn a total of 178.00 from holding State Farm Balanced or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Farm Balanced vs. Delaware Limited Term Diversif
Performance |
| Timeline |
| State Farm Balanced |
| Delaware Limited Term |
State Farm and Delaware Limited-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Farm and Delaware Limited-term
The main advantage of trading using opposite State Farm and Delaware Limited-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Farm position performs unexpectedly, Delaware Limited-term 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 Delaware Limited-term will offset losses from the drop in Delaware Limited-term's long position.| State Farm vs. John Hancock Money | State Farm vs. T Rowe Price | State Farm vs. Rbc Bluebay Global | State Farm vs. Multisector Bond Sma |
| Delaware Limited-term vs. Aqr Long Short Equity | Delaware Limited-term vs. Vanguard Short Term Federal | Delaware Limited-term vs. Rbc Short Duration | Delaware Limited-term vs. Barings Active Short |
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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