Correlation Between Stone Ridge and Enhanced Fixed
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Enhanced Fixed 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 Enhanced Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Ridge Diversified and Enhanced Fixed Income, you can compare the effects of market volatilities on Stone Ridge and Enhanced Fixed 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 Enhanced Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Enhanced Fixed.
Diversification Opportunities for Stone Ridge and Enhanced Fixed
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Stone and Enhanced is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Enhanced Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Fixed Income 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 Diversified are associated (or correlated) with Enhanced Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Fixed Income has no effect on the direction of Stone Ridge i.e., Stone Ridge and Enhanced Fixed go up and down completely randomly.
Pair Corralation between Stone Ridge and Enhanced Fixed
Assuming the 90 days horizon Stone Ridge Diversified is expected to under-perform the Enhanced Fixed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stone Ridge Diversified is 1.74 times less risky than Enhanced Fixed. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Enhanced Fixed Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 999.00 in Enhanced Fixed Income on November 7, 2024 and sell it today you would earn a total of 7.00 from holding Enhanced Fixed Income or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Enhanced Fixed Income
Performance |
| Timeline |
| Stone Ridge Diversified |
| Enhanced Fixed Income |
Stone Ridge and Enhanced Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Enhanced Fixed
The main advantage of trading using opposite Stone Ridge and Enhanced Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Enhanced Fixed 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 Enhanced Fixed will offset losses from the drop in Enhanced Fixed's long position.| Stone Ridge vs. Texton Property | Stone Ridge vs. Prudential Real Estate | Stone Ridge vs. Redwood Real Estate | Stone Ridge vs. Vy Clarion Real |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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