Correlation Between Stone Ridge and Barings Global
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Barings Global 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 Barings Global 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 Barings Global Floating, you can compare the effects of market volatilities on Stone Ridge and Barings Global 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 Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Barings Global.
Diversification Opportunities for Stone Ridge and Barings Global
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stone and Barings is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Stone Ridge i.e., Stone Ridge and Barings Global go up and down completely randomly.
Pair Corralation between Stone Ridge and Barings Global
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 1.06 times more return on investment than Barings Global. However, Stone Ridge is 1.06 times more volatile than Barings Global Floating. It trades about 0.25 of its potential returns per unit of risk. Barings Global Floating is currently generating about 0.23 per unit of risk. If you would invest 891.00 in Stone Ridge Diversified on September 14, 2024 and sell it today you would earn a total of 251.00 from holding Stone Ridge Diversified or generate 28.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Barings Global Floating
Performance |
| Timeline |
| Stone Ridge Diversified |
| Barings Global Floating |
Stone Ridge and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Barings Global
The main advantage of trading using opposite Stone Ridge and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Barings Global 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 Barings Global will offset losses from the drop in Barings Global's long position.| Stone Ridge vs. Touchstone Premium Yield | Stone Ridge vs. Dws Government Money | Stone Ridge vs. Alliancebernstein National Municipal | Stone Ridge vs. T Rowe Price |
| Barings Global vs. Boston Partners Longshort | Barings Global vs. Barings Active Short | Barings Global vs. Quantitative Longshort Equity | Barings Global vs. Siit Ultra Short |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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