Correlation Between Us Global and State Street
Can any of the company-specific risk be diversified away by investing in both Us Global 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 Us Global and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Global Investors and State Street Equity, you can compare the effects of market volatilities on Us Global 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 Us Global with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and State Street.
Diversification Opportunities for Us Global and State Street
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USLUX and State is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Investors and State Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Equity and Us Global 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 Us Global Investors 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 Equity has no effect on the direction of Us Global i.e., Us Global and State Street go up and down completely randomly.
Pair Corralation between Us Global and State Street
Assuming the 90 days horizon Us Global is expected to generate 2.39 times less return on investment than State Street. In addition to that, Us Global is 1.07 times more volatile than State Street Equity. It trades about 0.14 of its total potential returns per unit of risk. State Street Equity is currently generating about 0.36 per unit of volatility. If you would invest 52,397 in State Street Equity on September 1, 2024 and sell it today you would earn a total of 3,073 from holding State Street Equity or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Us Global Investors vs. State Street Equity
Performance |
| Timeline |
| Us Global Investors |
| State Street Equity |
Us Global and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Global and State Street
The main advantage of trading using opposite Us Global and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Global 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.| Us Global vs. Jpmorgan Small Cap | Us Global vs. Kinetics Small Cap | Us Global vs. Small Midcap Dividend Income | Us Global vs. Small Pany Growth |
| State Street vs. Us Global Investors | State Street vs. Kinetics Global Fund | State Street vs. Blue Current Global | State Street vs. Pimco Global Multi Asset |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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