Correlation Between Stone Ridge and Nuveen Michigan
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Nuveen Michigan 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 Nuveen Michigan 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 Nuveen Michigan Municipal, you can compare the effects of market volatilities on Stone Ridge and Nuveen Michigan 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 Nuveen Michigan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Nuveen Michigan.
Diversification Opportunities for Stone Ridge and Nuveen Michigan
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stone and Nuveen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Nuveen Michigan Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Michigan Municipal 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 Nuveen Michigan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Michigan Municipal has no effect on the direction of Stone Ridge i.e., Stone Ridge and Nuveen Michigan go up and down completely randomly.
Pair Corralation between Stone Ridge and Nuveen Michigan
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 0.74 times more return on investment than Nuveen Michigan. However, Stone Ridge Diversified is 1.36 times less risky than Nuveen Michigan. It trades about -0.11 of its potential returns per unit of risk. Nuveen Michigan Municipal is currently generating about -0.1 per unit of risk. If you would invest 1,068 in Stone Ridge Diversified on November 3, 2024 and sell it today you would lose (4.00) from holding Stone Ridge Diversified or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Nuveen Michigan Municipal
Performance |
| Timeline |
| Stone Ridge Diversified |
| Nuveen Michigan Municipal |
Stone Ridge and Nuveen Michigan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Nuveen Michigan
The main advantage of trading using opposite Stone Ridge and Nuveen Michigan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Nuveen Michigan 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 Nuveen Michigan will offset losses from the drop in Nuveen Michigan's long position.| Stone Ridge vs. Angel Oak Financial | Stone Ridge vs. Goldman Sachs Financial | Stone Ridge vs. Schwab Government Money | Stone Ridge vs. Mesirow Financial Small |
| Nuveen Michigan vs. Putnman Retirement Ready | Nuveen Michigan vs. College Retirement Equities | Nuveen Michigan vs. Voya Target Retirement | Nuveen Michigan vs. American Funds Retirement |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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