Correlation Between State Street and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both State Street and Affiliated Managers 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 Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Corp and Affiliated Managers Group, you can compare the effects of market volatilities on State Street and Affiliated Managers 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 Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Affiliated Managers.
Diversification Opportunities for State Street and Affiliated Managers
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and Affiliated is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Corp are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of State Street i.e., State Street and Affiliated Managers go up and down completely randomly.
Pair Corralation between State Street and Affiliated Managers
Considering the 90-day investment horizon State Street Corp is expected to generate 1.02 times more return on investment than Affiliated Managers. However, State Street is 1.02 times more volatile than Affiliated Managers Group. It trades about 0.06 of its potential returns per unit of risk. Affiliated Managers Group is currently generating about 0.05 per unit of risk. If you would invest 6,890 in State Street Corp on November 1, 2024 and sell it today you would earn a total of 3,333 from holding State Street Corp or generate 48.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Corp vs. Affiliated Managers Group
Performance |
| Timeline |
| State Street Corp |
| Affiliated Managers |
State Street and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Affiliated Managers
The main advantage of trading using opposite State Street and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| State Street vs. Northern Trust | State Street vs. Franklin Resources | State Street vs. Invesco Plc | State Street vs. T Rowe Price |
| Affiliated Managers vs. Blue Owl Capital | Affiliated Managers vs. TPG Inc | Affiliated Managers vs. Patria Investments | Affiliated Managers vs. Cion Investment Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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