Correlation Between Barings Active and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Stone Ridge Diversified, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Stone Ridge.
Diversification Opportunities for Barings Active and Stone Ridge
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Stone is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short 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 Barings Active 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 Barings Active Short 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 Barings Active i.e., Barings Active and Stone Ridge go up and down completely randomly.
Pair Corralation between Barings Active and Stone Ridge
Assuming the 90 days horizon Barings Active Short is expected to generate 0.46 times more return on investment than Stone Ridge. However, Barings Active Short is 2.16 times less risky than Stone Ridge. It trades about 0.14 of its potential returns per unit of risk. Stone Ridge Diversified is currently generating about -0.11 per unit of risk. If you would invest 925.00 in Barings Active Short on November 7, 2024 and sell it today you would earn a total of 2.00 from holding Barings Active Short or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Stone Ridge Diversified
Performance |
| Timeline |
| Barings Active Short |
| Stone Ridge Diversified |
Barings Active and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Stone Ridge
The main advantage of trading using opposite Barings Active and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. Artisan Developing World | Barings Active vs. Eagle Mlp Strategy | Barings Active vs. Growth Strategy Fund | Barings Active vs. Doubleline Emerging Markets |
| Stone Ridge vs. Texton Property | Stone Ridge vs. Prudential Real Estate | Stone Ridge vs. Redwood Real Estate | Stone Ridge vs. Vy Clarion Real |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |