Correlation Between State Auto and CME
Can any of the company-specific risk be diversified away by investing in both State Auto and CME 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 Auto and CME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Auto Financial and CME Group, you can compare the effects of market volatilities on State Auto and CME 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 Auto with a short position of CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Auto and CME.
Diversification Opportunities for State Auto and CME
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and CME is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Auto Financial and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group and State Auto 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 Auto Financial are associated (or correlated) with CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of State Auto i.e., State Auto and CME go up and down completely randomly.
Pair Corralation between State Auto and CME
If you would invest 17,009 in CME Group on January 25, 2024 and sell it today you would earn a total of 4,668 from holding CME Group or generate 27.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
State Auto Financial vs. CME Group
Performance |
| Timeline |
| State Auto Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CME Group |
State Auto and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Auto and CME
The main advantage of trading using opposite State Auto and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Auto position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| State Auto vs. Stereo Vision Entertainment | State Auto vs. Levi Strauss Co | State Auto vs. Nike Inc | State Auto vs. Cedar Fair LP |
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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