Correlation Between State Street and ETRADE Financial
Can any of the company-specific risk be diversified away by investing in both State Street and ETRADE Financial 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 ETRADE Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Street Corp and ETRADE Financial LLC, you can compare the effects of market volatilities on State Street and ETRADE Financial 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 ETRADE Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Street and ETRADE Financial.
Diversification Opportunities for State Street and ETRADE Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and ETRADE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Street Corp and ETRADE Financial LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRADE Financial LLC 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 Corp are associated (or correlated) with ETRADE Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRADE Financial LLC has no effect on the direction of State Street i.e., State Street and ETRADE Financial go up and down completely randomly.
Pair Corralation between State Street and ETRADE Financial
If you would invest (100.00) in ETRADE Financial LLC on December 29, 2023 and sell it today you would earn a total of 100.00 from holding ETRADE Financial LLC or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
State Street Corp vs. ETRADE Financial LLC
Performance |
Timeline |
State Street Corp |
ETRADE Financial LLC |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
State Street and ETRADE Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Street and ETRADE Financial
The main advantage of trading using opposite State Street and ETRADE Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Street position performs unexpectedly, ETRADE Financial 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 ETRADE Financial will offset losses from the drop in ETRADE Financial's long position.State Street vs. Visa Class A | State Street vs. Nocturne Acquisition Corp | State Street vs. Monterey Capital Acquisition | State Street vs. Mill City Ventures |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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