Correlation Between State Street and Munivest Fund
Can any of the company-specific risk be diversified away by investing in both State Street and Munivest Fund 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 Munivest Fund 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 Munivest Fund, you can compare the effects of market volatilities on State Street and Munivest Fund 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 Munivest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Munivest Fund.
Diversification Opportunities for State Street and Munivest Fund
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Munivest is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of State Street i.e., State Street and Munivest Fund go up and down completely randomly.
Pair Corralation between State Street and Munivest Fund
Considering the 90-day investment horizon State Street Corp is expected to generate 1.84 times more return on investment than Munivest Fund. However, State Street is 1.84 times more volatile than Munivest Fund. It trades about 0.22 of its potential returns per unit of risk. Munivest Fund is currently generating about 0.12 per unit of risk. If you would invest 9,298 in State Street Corp on August 28, 2024 and sell it today you would earn a total of 581.00 from holding State Street Corp or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street Corp vs. Munivest Fund
Performance |
| Timeline |
| State Street Corp |
| Munivest Fund |
State Street and Munivest Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and Munivest Fund
The main advantage of trading using opposite State Street and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Munivest Fund 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.| State Street vs. Northern Trust | State Street vs. Franklin Resources | State Street vs. Invesco Plc | State Street vs. T Rowe Price |
| Munivest Fund vs. DTF Tax Free | Munivest Fund vs. MFS High Yield | Munivest Fund vs. MFS High Income | Munivest Fund vs. John Hancock Income |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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