Correlation Between State Street and H FARM
Can any of the company-specific risk be diversified away by investing in both State Street and H FARM 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 H FARM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street and H FARM SPA, you can compare the effects of market volatilities on State Street and H FARM 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 H FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and H FARM.
Diversification Opportunities for State Street and H FARM
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and 5JQ is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding State Street and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA 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 H FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of State Street i.e., State Street and H FARM go up and down completely randomly.
Pair Corralation between State Street and H FARM
Assuming the 90 days horizon State Street is expected to generate 0.33 times more return on investment than H FARM. However, State Street is 3.02 times less risky than H FARM. It trades about 0.05 of its potential returns per unit of risk. H FARM SPA is currently generating about 0.0 per unit of risk. If you would invest 6,565 in State Street on August 28, 2024 and sell it today you would earn a total of 2,766 from holding State Street or generate 42.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Street vs. H FARM SPA
Performance |
| Timeline |
| State Street |
| H FARM SPA |
State Street and H FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Street and H FARM
The main advantage of trading using opposite State Street and H FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, H FARM 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 H FARM will offset losses from the drop in H FARM's long position.| State Street vs. The Bank of | State Street vs. Superior Plus Corp | State Street vs. NMI Holdings | State Street vs. Origin Agritech |
| H FARM vs. Dairy Farm International | H FARM vs. JJ SNACK FOODS | H FARM vs. Cal Maine Foods | H FARM vs. TYSON FOODS A |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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