Correlation Between Innventure, and State Street

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

By analyzing existing cross correlation between Innventure, and State Street, you can compare the effects of market volatilities on Innventure, 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 Innventure, with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innventure, and State Street.

Diversification Opportunities for Innventure, and State Street

-0.32

Correlation Coefficient

Innventure,  State Street

Very good diversification

The 3 months correlation between Innventure, and State is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Innventure, and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street and Innventure, 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 Innventure, 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 has no effect on the direction of Innventure, i.e., Innventure, and State Street go up and down completely randomly.

Pair Corralation between Innventure, and State Street

Considering the 90-day investment horizon Innventure, is expected to generate 9.62 times more return on investment than State Street. However, Innventure, is 9.62 times more volatile than State Street. It trades about 0.23 of its potential returns per unit of risk. State Street is currently generating about -0.2 per unit of risk. If you would invest  1,066  in Innventure, on September 22, 2024 and sell it today you would earn a total of  300.00  from holding Innventure, or generate 28.14% return on investment over 90 days.

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

Innventure,  vs.  State Street

Innventure,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innventure, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Innventure, showed solid returns over the last few months and may actually be approaching a breakup point.

State Street

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days State Street has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, State Street is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Innventure, and State Street

The main advantage of trading using opposite Innventure, and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innventure, 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.

The idea behind Innventure, and State Street 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.