Correlation Between Stone Ridge and US Treasury
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and US Treasury 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 Stone Ridge and US Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Ridge 2056 and US Treasury 12, you can compare the effects of market volatilities on Stone Ridge and US Treasury 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 Stone Ridge with a short position of US Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and US Treasury.
Diversification Opportunities for Stone Ridge and US Treasury
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stone and OBIL is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge 2056 and US Treasury 12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Treasury 12 and Stone Ridge 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 Stone Ridge 2056 are associated (or correlated) with US Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Treasury 12 has no effect on the direction of Stone Ridge i.e., Stone Ridge and US Treasury go up and down completely randomly.
Pair Corralation between Stone Ridge and US Treasury
Given the investment horizon of 90 days Stone Ridge 2056 is expected to generate 21.63 times more return on investment than US Treasury. However, Stone Ridge is 21.63 times more volatile than US Treasury 12. It trades about 0.09 of its potential returns per unit of risk. US Treasury 12 is currently generating about 0.46 per unit of risk. If you would invest 1,610 in Stone Ridge 2056 on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Stone Ridge 2056 or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stone Ridge 2056 vs. US Treasury 12
Performance |
| Timeline |
| Stone Ridge 2056 |
| US Treasury 12 |
Stone Ridge and US Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and US Treasury
The main advantage of trading using opposite Stone Ridge and US Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, US Treasury 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 US Treasury will offset losses from the drop in US Treasury's long position.| Stone Ridge vs. Vanguard Total Stock | Stone Ridge vs. SPDR SP 500 | Stone Ridge vs. iShares Core SP | Stone Ridge vs. Vanguard Total Bond |
| US Treasury vs. SPDR Barclays Long | US Treasury vs. SPDR Portfolio Intermediate | US Treasury vs. SPDR Barclays Short | US Treasury vs. SPDR Barclays Intermediate |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |