Correlation Between Ab Select and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Ab Select and Stone Ridge 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 Ab Select and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Stone Ridge Diversified, you can compare the effects of market volatilities on Ab Select and Stone Ridge 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 Ab Select with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Stone Ridge.
Diversification Opportunities for Ab Select and Stone Ridge
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between AUUIX and Stone is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified and Ab Select 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 Ab Select Equity are associated (or correlated) with Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Ab Select i.e., Ab Select and Stone Ridge go up and down completely randomly.
Pair Corralation between Ab Select and Stone Ridge
Assuming the 90 days horizon Ab Select Equity is expected to under-perform the Stone Ridge. In addition to that, Ab Select is 8.88 times more volatile than Stone Ridge Diversified. It trades about -0.24 of its total potential returns per unit of risk. Stone Ridge Diversified is currently generating about 0.4 per unit of volatility. If you would invest 1,043 in Stone Ridge Diversified on September 25, 2024 and sell it today you would earn a total of 17.00 from holding Stone Ridge Diversified or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Stone Ridge Diversified
Performance |
| Timeline |
| Ab Select Equity |
| Stone Ridge Diversified |
Ab Select and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Stone Ridge
The main advantage of trading using opposite Ab Select and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Ab Select vs. Ab E Opportunities | Ab Select vs. Select Fund C | Ab Select vs. Select Fund R | Ab Select vs. Amg Renaissance Large |
| Stone Ridge vs. Stone Ridge High | Stone Ridge vs. Stone Ridge High | Stone Ridge vs. Jacob Micro Cap | Stone Ridge vs. Franklin Dynatech Fund |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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