Correlation Between Stone Ridge and Inflation Protected
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Inflation Protected 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 Inflation Protected 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 Inflation Protected Bond Fund, you can compare the effects of market volatilities on Stone Ridge and Inflation Protected 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 Inflation Protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Inflation Protected.
Diversification Opportunities for Stone Ridge and Inflation Protected
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stone and Inflation is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Stone Ridge i.e., Stone Ridge and Inflation Protected go up and down completely randomly.
Pair Corralation between Stone Ridge and Inflation Protected
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 0.5 times more return on investment than Inflation Protected. However, Stone Ridge Diversified is 2.0 times less risky than Inflation Protected. It trades about 0.23 of its potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 994.00 in Stone Ridge Diversified on October 26, 2024 and sell it today you would earn a total of 71.00 from holding Stone Ridge Diversified or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Stone Ridge Diversified |
| Inflation Protected |
Stone Ridge and Inflation Protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Inflation Protected
The main advantage of trading using opposite Stone Ridge and Inflation Protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Inflation Protected 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 Inflation Protected will offset losses from the drop in Inflation Protected's long position.| Stone Ridge vs. Simt Multi Asset Inflation | Stone Ridge vs. Lord Abbett Inflation | Stone Ridge vs. Atac Inflation Rotation | Stone Ridge vs. Guidepath Managed Futures |
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 CEOs Directory module to screen CEOs from public companies around the world.
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