Correlation Between Stone Ridge and Utilities Fund
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Utilities Fund 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 Utilities Fund 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 Utilities Fund Class, you can compare the effects of market volatilities on Stone Ridge and Utilities Fund 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 Utilities Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Utilities Fund.
Diversification Opportunities for Stone Ridge and Utilities Fund
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stone and Utilities is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Utilities Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Fund Class 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 Utilities Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Fund Class has no effect on the direction of Stone Ridge i.e., Stone Ridge and Utilities Fund go up and down completely randomly.
Pair Corralation between Stone Ridge and Utilities Fund
Assuming the 90 days horizon Stone Ridge Diversified is expected to under-perform the Utilities Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stone Ridge Diversified is 8.46 times less risky than Utilities Fund. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Utilities Fund Class is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,866 in Utilities Fund Class on November 2, 2024 and sell it today you would earn a total of 76.00 from holding Utilities Fund Class or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Utilities Fund Class
Performance |
| Timeline |
| Stone Ridge Diversified |
| Utilities Fund Class |
Stone Ridge and Utilities Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Utilities Fund
The main advantage of trading using opposite Stone Ridge and Utilities Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Utilities Fund 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 Utilities Fund will offset losses from the drop in Utilities Fund's long position.| Stone Ridge vs. Gmo Global Equity | Stone Ridge vs. Calvert International Equity | Stone Ridge vs. T Rowe Price | Stone Ridge vs. Us Vector Equity |
| Utilities Fund vs. Dominion Energy | Utilities Fund vs. Consolidated Edison | Utilities Fund vs. Eversource Energy | Utilities Fund vs. FirstEnergy |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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