Correlation Between Small Cap and State Street
Can any of the company-specific risk be diversified away by investing in both Small Cap and State Street 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 Small Cap and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and State Street Master, you can compare the effects of market volatilities on Small Cap and State Street 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 Small Cap with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and State Street.
Diversification Opportunities for Small Cap and State Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Small and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and State Street Master in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Master and Small Cap 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 Small Cap Stock are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Master has no effect on the direction of Small Cap i.e., Small Cap and State Street go up and down completely randomly.
Pair Corralation between Small Cap and State Street
If you would invest 100.00 in State Street Master on September 13, 2024 and sell it today you would earn a total of 0.00 from holding State Street Master or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Small Cap Stock vs. State Street Master
Performance |
| Timeline |
| Small Cap Stock |
| State Street Master |
Small Cap and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and State Street
The main advantage of trading using opposite Small Cap and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Small Cap vs. Goldman Sachs Real | Small Cap vs. Fidelity Real Estate | Small Cap vs. Redwood Real Estate | Small Cap vs. Vy Clarion Real |
| State Street vs. Putnam Convertible Incm Gwth | State Street vs. Calamos Dynamic Convertible | State Street vs. Virtus Convertible | State Street vs. Fidelity Sai 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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