Correlation Between Stone Ridge and Jpmorgan High
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Jpmorgan High 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 Jpmorgan High 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 Jpmorgan High Yield, you can compare the effects of market volatilities on Stone Ridge and Jpmorgan High 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 Jpmorgan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Jpmorgan High.
Diversification Opportunities for Stone Ridge and Jpmorgan High
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stone and Jpmorgan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Jpmorgan High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan High Yield 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 Jpmorgan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan High Yield has no effect on the direction of Stone Ridge i.e., Stone Ridge and Jpmorgan High go up and down completely randomly.
Pair Corralation between Stone Ridge and Jpmorgan High
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 0.72 times more return on investment than Jpmorgan High. However, Stone Ridge Diversified is 1.39 times less risky than Jpmorgan High. It trades about 0.31 of its potential returns per unit of risk. Jpmorgan High Yield is currently generating about -0.24 per unit of risk. If you would invest 1,055 in Stone Ridge Diversified on October 9, 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 | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Jpmorgan High Yield
Performance |
| Timeline |
| Stone Ridge Diversified |
| Jpmorgan High Yield |
Stone Ridge and Jpmorgan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Jpmorgan High
The main advantage of trading using opposite Stone Ridge and Jpmorgan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Jpmorgan High 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 Jpmorgan High will offset losses from the drop in Jpmorgan High's long position.| Stone Ridge vs. Ab Government Exchange | Stone Ridge vs. Ab Government Exchange | Stone Ridge vs. Ubs Money Series | Stone Ridge vs. Hewitt Money Market |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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