Correlation Between Stone Ridge and Elfun Diversified
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Elfun Diversified 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 Elfun Diversified 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 Elfun Diversified Fund, you can compare the effects of market volatilities on Stone Ridge and Elfun Diversified 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 Elfun Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Elfun Diversified.
Diversification Opportunities for Stone Ridge and Elfun Diversified
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stone and Elfun is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Elfun Diversified Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elfun Diversified 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 Elfun Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elfun Diversified has no effect on the direction of Stone Ridge i.e., Stone Ridge and Elfun Diversified go up and down completely randomly.
Pair Corralation between Stone Ridge and Elfun Diversified
Assuming the 90 days horizon Stone Ridge is expected to generate 1.77 times less return on investment than Elfun Diversified. But when comparing it to its historical volatility, Stone Ridge Diversified is 1.83 times less risky than Elfun Diversified. It trades about 0.24 of its potential returns per unit of risk. Elfun Diversified Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,174 in Elfun Diversified Fund on September 13, 2024 and sell it today you would earn a total of 34.00 from holding Elfun Diversified Fund or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Elfun Diversified Fund
Performance |
| Timeline |
| Stone Ridge Diversified |
| Elfun Diversified |
Stone Ridge and Elfun Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Elfun Diversified
The main advantage of trading using opposite Stone Ridge and Elfun Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Elfun Diversified 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 Elfun Diversified will offset losses from the drop in Elfun Diversified's long position.| Stone Ridge vs. Barings Global Floating | Stone Ridge vs. Legg Mason Global | Stone Ridge vs. Siit Global Managed | Stone Ridge vs. Ab Global Risk |
| Elfun Diversified vs. State Street Target | Elfun Diversified vs. State Street Target | Elfun Diversified vs. Ssga International Stock | Elfun Diversified vs. State Street Target |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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