Correlation Between Vy Goldman and State Street

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

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

Diversification Opportunities for Vy Goldman and State Street

0.59

Correlation Coefficient

Vy Goldman  State Street

Very weak diversification

The 3 months correlation between VGSBX and State is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vy Goldman Sachs and State Street Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Premier and Vy Goldman 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 Vy Goldman Sachs 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 Premier has no effect on the direction of Vy Goldman i.e., Vy Goldman and State Street go up and down completely randomly.

Pair Corralation between Vy Goldman and State Street

Assuming the 90 days horizon Vy Goldman is expected to generate 2.88 times less return on investment than State Street. But when comparing it to its historical volatility, Vy Goldman Sachs is 3.47 times less risky than State Street. It trades about 0.02 of its potential returns per unit of risk. State Street Premier is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  11,687  in State Street Premier on October 24, 2024 and sell it today you would earn a total of  286.00  from holding State Street Premier or generate 2.45% return on investment over 90 days.

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

Vy Goldman Sachs  vs.  State Street Premier

Vy Goldman Sachs

Risk-Adjusted Performance

0 of 100

Very Weak

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

State Street Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days State Street Premier has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Vy Goldman and State Street

The main advantage of trading using opposite Vy Goldman and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy Goldman 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 Vy Goldman Sachs and State Street Premier 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.