Correlation Between Stone Ridge and Global X
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Ridge 2060 and Global X Funds, you can compare the effects of market volatilities on Stone Ridge and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Global X.
Diversification Opportunities for Stone Ridge and Global X
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stone and Global is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge 2060 and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 2060 are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Stone Ridge i.e., Stone Ridge and Global X go up and down completely randomly.
Pair Corralation between Stone Ridge and Global X
Given the investment horizon of 90 days Stone Ridge 2060 is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Stone Ridge 2060 is 203.62 times less risky than Global X. The etf trades about -0.19 of its potential returns per unit of risk. The Global X Funds is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Global X Funds on August 29, 2024 and sell it today you would earn a total of 4,865 from holding Global X Funds or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.38% |
| Values | Daily Returns |
Stone Ridge 2060 vs. Global X Funds
Performance |
| Timeline |
| Stone Ridge 2060 |
| Global X Funds |
Stone Ridge and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Global X
The main advantage of trading using opposite Stone Ridge and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Stone Ridge vs. Global X Funds | Stone Ridge vs. US Treasury 12 | Stone Ridge vs. Tidal Trust II | Stone Ridge vs. Franklin Liberty Treasury |
| Global X vs. Vanguard Total Stock | Global X vs. SPDR SP 500 | Global X vs. iShares Core SP | Global X vs. Vanguard Total Bond |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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