Correlation Between State Street and Atlas Corp
Can any of the company-specific risk be diversified away by investing in both State Street and Atlas Corp 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 Atlas Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street and Atlas Corp, you can compare the effects of market volatilities on State Street and Atlas Corp 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 Atlas Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Atlas Corp.
Diversification Opportunities for State Street and Atlas Corp
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between State and Atlas is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding State Street and Atlas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Corp 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 are associated (or correlated) with Atlas Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Corp has no effect on the direction of State Street i.e., State Street and Atlas Corp go up and down completely randomly.
Pair Corralation between State Street and Atlas Corp
Assuming the 90 days trading horizon State Street is expected to under-perform the Atlas Corp. In addition to that, State Street is 1.18 times more volatile than Atlas Corp. It trades about -0.08 of its total potential returns per unit of risk. Atlas Corp is currently generating about 0.05 per unit of volatility. If you would invest 2,480 in Atlas Corp on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Atlas Corp or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street vs. Atlas Corp
Performance |
| Timeline |
| State Street |
| Atlas Corp |
State Street and Atlas Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Atlas Corp
The main advantage of trading using opposite State Street and Atlas Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Atlas Corp 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 Atlas Corp will offset losses from the drop in Atlas Corp's long position.| State Street vs. The Gabelli Equity | State Street vs. The Gabelli Multimedia | State Street vs. The Gabelli Equity | State Street vs. Virtus AllianzGI Convertible |
| Atlas Corp vs. Atlas Corp | Atlas Corp vs. Costamare | Atlas Corp vs. Costamare | Atlas Corp vs. Aquagold International |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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