Correlation Between Mutual Of and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Stone Ridge Diversified, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Stone Ridge.
Diversification Opportunities for Mutual Of and Stone Ridge
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mutual and Stone is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America 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 Mutual Of 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 Mutual Of America 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 Mutual Of i.e., Mutual Of and Stone Ridge go up and down completely randomly.
Pair Corralation between Mutual Of and Stone Ridge
Assuming the 90 days horizon Mutual Of America is expected to generate 7.6 times more return on investment than Stone Ridge. However, Mutual Of is 7.6 times more volatile than Stone Ridge Diversified. It trades about 0.26 of its potential returns per unit of risk. Stone Ridge Diversified is currently generating about 0.2 per unit of risk. If you would invest 1,504 in Mutual Of America on August 30, 2024 and sell it today you would earn a total of 150.00 from holding Mutual Of America or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mutual Of America vs. Stone Ridge Diversified
Performance |
| Timeline |
| Mutual Of America |
| Stone Ridge Diversified |
Mutual Of and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Stone Ridge
The main advantage of trading using opposite Mutual Of and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.| Mutual Of vs. Vanguard Small Cap Value | Mutual Of vs. Vanguard Small Cap Value | Mutual Of vs. Us Small Cap | Mutual Of vs. Us Targeted Value |
| Stone Ridge vs. Mutual Of America | Stone Ridge vs. Fpa Queens Road | Stone Ridge vs. Lord Abbett Small | Stone Ridge vs. Ab Discovery Value |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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