Correlation Between Stone Ridge and Franklin
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Franklin 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 Franklin 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 Franklin Government Money, you can compare the effects of market volatilities on Stone Ridge and Franklin 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 Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Franklin.
Diversification Opportunities for Stone Ridge and Franklin
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stone and Franklin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Franklin Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Government Money 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 Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Government Money has no effect on the direction of Stone Ridge i.e., Stone Ridge and Franklin go up and down completely randomly.
Pair Corralation between Stone Ridge and Franklin
If you would invest 1,055 in Stone Ridge Diversified on October 10, 2024 and sell it today you would earn a total of 13.00 from holding Stone Ridge Diversified or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Franklin Government Money
Performance |
| Timeline |
| Stone Ridge Diversified |
| Franklin Government Money |
Stone Ridge and Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Franklin
The main advantage of trading using opposite Stone Ridge and Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Franklin 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 Franklin will offset losses from the drop in Franklin's long position.| Stone Ridge vs. T Rowe Price | Stone Ridge vs. Mairs Power Growth | Stone Ridge vs. Mid Cap Growth | Stone Ridge vs. Morningstar Aggressive Growth |
| Franklin vs. Deutsche Real Estate | Franklin vs. Nuveen Real Estate | Franklin vs. Pender Real Estate | Franklin vs. Short Real Estate |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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