Correlation Between Mairs Power and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Mairs Power 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 Mairs Power and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and Stone Ridge Diversified, you can compare the effects of market volatilities on Mairs Power 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 Mairs Power with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Stone Ridge.
Diversification Opportunities for Mairs Power and Stone Ridge
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mairs and Stone is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth 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 Mairs Power 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 Mairs Power Growth 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 Mairs Power i.e., Mairs Power and Stone Ridge go up and down completely randomly.
Pair Corralation between Mairs Power and Stone Ridge
Assuming the 90 days horizon Mairs Power Growth is expected to generate 5.49 times more return on investment than Stone Ridge. However, Mairs Power is 5.49 times more volatile than Stone Ridge Diversified. It trades about 0.12 of its potential returns per unit of risk. Stone Ridge Diversified is currently generating about 0.15 per unit of risk. If you would invest 17,352 in Mairs Power Growth on October 25, 2024 and sell it today you would earn a total of 353.00 from holding Mairs Power Growth or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Stone Ridge Diversified
Performance |
| Timeline |
| Mairs Power Growth |
| Stone Ridge Diversified |
Mairs Power and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Stone Ridge
The main advantage of trading using opposite Mairs Power and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power 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.| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
| Stone Ridge vs. Simt Multi Asset Inflation | Stone Ridge vs. Lord Abbett Inflation | Stone Ridge vs. Atac Inflation Rotation | Stone Ridge vs. Guidepath Managed Futures |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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