Correlation Between Pace International and State Street
Can any of the company-specific risk be diversified away by investing in both Pace International 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 Pace International and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and State Street Core, you can compare the effects of market volatilities on Pace International 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 Pace International with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and State Street.
Diversification Opportunities for Pace International and State Street
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pace and State is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and State Street Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Core and Pace International 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 Pace International Emerging 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 Core has no effect on the direction of Pace International i.e., Pace International and State Street go up and down completely randomly.
Pair Corralation between Pace International and State Street
Assuming the 90 days horizon Pace International Emerging is expected to generate 1.19 times more return on investment than State Street. However, Pace International is 1.19 times more volatile than State Street Core. It trades about 0.31 of its potential returns per unit of risk. State Street Core is currently generating about 0.23 per unit of risk. If you would invest 1,518 in Pace International Emerging on July 8, 2025 and sell it today you would earn a total of 206.00 from holding Pace International Emerging or generate 13.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Pace International Emerging vs. State Street Core
Performance |
Timeline |
Pace International |
State Street Core |
Pace International and State Street Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pace International and State Street
The main advantage of trading using opposite Pace International and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International 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.Pace International vs. Gamco Natural Resources | Pace International vs. Alpsalerian Energy Infrastructure | Pace International vs. Global Resources Fund | Pace International vs. World Energy Fund |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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