Correlation Between Stone Ridge and American Funds
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and American Funds 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 American Funds 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 American Funds Government, you can compare the effects of market volatilities on Stone Ridge and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and American Funds.
Diversification Opportunities for Stone Ridge and American Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stone and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and American Funds Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Government 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Government has no effect on the direction of Stone Ridge i.e., Stone Ridge and American Funds go up and down completely randomly.
Pair Corralation between Stone Ridge and American Funds
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 2.78 times more return on investment than American Funds. However, Stone Ridge is 2.78 times more volatile than American Funds Government. It trades about 0.21 of its potential returns per unit of risk. American Funds Government is currently generating about 0.09 per unit of risk. If you would invest 998.00 in Stone Ridge Diversified on November 4, 2024 and sell it today you would earn a total of 66.00 from holding Stone Ridge Diversified or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.12% |
| Values | Daily Returns |
Stone Ridge Diversified vs. American Funds Government
Performance |
| Timeline |
| Stone Ridge Diversified |
| American Funds Government |
Stone Ridge and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and American Funds
The main advantage of trading using opposite Stone Ridge and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' 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 |
| American Funds vs. Americafirst Large Cap | American Funds vs. Blackrock Large Cap | American Funds vs. Oakmark Fund Investor | American Funds vs. Fisher Large Cap |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |