Correlation Between Stone Ridge and Blackrock 40/60
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Blackrock 40/60 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 Blackrock 40/60 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 Blackrock 4060 Target, you can compare the effects of market volatilities on Stone Ridge and Blackrock 40/60 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 Blackrock 40/60. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Blackrock 40/60.
Diversification Opportunities for Stone Ridge and Blackrock 40/60
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stone and Blackrock is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Blackrock 4060 Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock 4060 Target 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 Blackrock 40/60. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock 4060 Target has no effect on the direction of Stone Ridge i.e., Stone Ridge and Blackrock 40/60 go up and down completely randomly.
Pair Corralation between Stone Ridge and Blackrock 40/60
Assuming the 90 days horizon Stone Ridge Diversified is expected to under-perform the Blackrock 40/60. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stone Ridge Diversified is 3.4 times less risky than Blackrock 40/60. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Blackrock 4060 Target is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,280 in Blackrock 4060 Target on October 31, 2024 and sell it today you would earn a total of 22.00 from holding Blackrock 4060 Target or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Blackrock 4060 Target
Performance |
| Timeline |
| Stone Ridge Diversified |
| Blackrock 4060 Target |
Stone Ridge and Blackrock 40/60 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Blackrock 40/60
The main advantage of trading using opposite Stone Ridge and Blackrock 40/60 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Blackrock 40/60 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 Blackrock 40/60 will offset losses from the drop in Blackrock 40/60's long position.| Stone Ridge vs. Tfa Quantitative | Stone Ridge vs. Cardinal Small Cap | Stone Ridge vs. Barings Active Short | Stone Ridge vs. Nasdaq 100 Index Fund |
| Blackrock 40/60 vs. Bbh Intermediate Municipal | Blackrock 40/60 vs. Franklin Adjustable Government | Blackrock 40/60 vs. Morningstar Municipal Bond | Blackrock 40/60 vs. California Municipal Portfolio |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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