Correlation Between State Street and Stringer Growth
Can any of the company-specific risk be diversified away by investing in both State Street and Stringer Growth 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 Stringer Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Premier and Stringer Growth Fund, you can compare the effects of market volatilities on State Street and Stringer Growth 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 Stringer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Stringer Growth.
Diversification Opportunities for State Street and Stringer Growth
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between State and Stringer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding State Street Premier and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth 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 Premier are associated (or correlated) with Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of State Street i.e., State Street and Stringer Growth go up and down completely randomly.
Pair Corralation between State Street and Stringer Growth
Assuming the 90 days horizon State Street Premier is expected to generate 1.9 times more return on investment than Stringer Growth. However, State Street is 1.9 times more volatile than Stringer Growth Fund. It trades about 0.35 of its potential returns per unit of risk. Stringer Growth Fund is currently generating about 0.26 per unit of risk. If you would invest 10,440 in State Street Premier on April 26, 2025 and sell it today you would earn a total of 2,285 from holding State Street Premier or generate 21.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
State Street Premier vs. Stringer Growth Fund
Performance |
Timeline |
State Street Premier |
Stringer Growth |
State Street and Stringer Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Street and Stringer Growth
The main advantage of trading using opposite State Street and Stringer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Stringer Growth 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 Stringer Growth will offset losses from the drop in Stringer Growth's long position.State Street vs. Aqr Large Cap | State Street vs. Americafirst Large Cap | State Street vs. Tax Managed Large Cap | State Street vs. Old Westbury Large |
Stringer Growth vs. Dreyfus Short Intermediate | Stringer Growth vs. Maryland Short Term Tax Free | Stringer Growth vs. Boston Partners Longshort | Stringer Growth vs. Nuveen Short Term |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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