Correlation Between State Street and Balanced Strategy

Can any of the company-specific risk be diversified away by investing in both State Street and Balanced Strategy 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 Balanced Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between State Street Target and Balanced Strategy Fund, you can compare the effects of market volatilities on State Street and Balanced Strategy 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 Balanced Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and Balanced Strategy.

Diversification Opportunities for State Street and Balanced Strategy

0.0

Correlation Coefficient

State Street  Balanced Strategy

Pay attention - limited upside

The 3 months correlation between State and Balanced is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Street Target and Balanced Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Strategy 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 Target are associated (or correlated) with Balanced Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Strategy has no effect on the direction of State Street i.e., State Street and Balanced Strategy go up and down completely randomly.

Pair Corralation between State Street and Balanced Strategy

If you would invest  1,009  in Balanced Strategy Fund on May 3, 2025 and sell it today you would earn a total of  69.00  from holding Balanced Strategy Fund or generate 6.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

State Street Target  vs.  Balanced Strategy Fund

State Street Target

Risk-Adjusted Performance

Very Weak

Over the last 90 days State Street Target has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, State Street is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Balanced Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Strategy Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Balanced Strategy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with State Street and Balanced Strategy

The main advantage of trading using opposite State Street and Balanced Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, Balanced Strategy 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 Balanced Strategy will offset losses from the drop in Balanced Strategy's long position.

The idea behind State Street Target and Balanced Strategy Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.