Correlation Between State Street and Track Data
Can any of the company-specific risk be diversified away by investing in both State Street and Track Data 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 Track Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street and Track Data, you can compare the effects of market volatilities on State Street and Track Data 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 Track Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Track Data.
Diversification Opportunities for State Street and Track Data
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and Track is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding State Street and Track Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Track Data 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 Track Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Track Data has no effect on the direction of State Street i.e., State Street and Track Data go up and down completely randomly.
Pair Corralation between State Street and Track Data
If you would invest 2,257 in State Street on September 2, 2024 and sell it today you would earn a total of 250.00 from holding State Street or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
State Street vs. Track Data
Performance |
| Timeline |
| State Street |
| Track Data |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
State Street and Track Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Track Data
The main advantage of trading using opposite State Street and Track Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Track Data 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 Track Data will offset losses from the drop in Track Data'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 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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