Correlation Between Stone Ridge and Aig Government
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Stone Ridge and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Aig Government.
Diversification Opportunities for Stone Ridge and Aig Government
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stone and Aig is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Stone Ridge i.e., Stone Ridge and Aig Government go up and down completely randomly.
Pair Corralation between Stone Ridge and Aig Government
Assuming the 90 days horizon Stone Ridge Diversified is expected to under-perform the Aig Government. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stone Ridge Diversified is 1.02 times less risky than Aig Government. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Aig Government Money is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,005 in Aig Government Money on November 7, 2024 and sell it today you would earn a total of 3.00 from holding Aig Government Money or generate 0.3% 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. Aig Government Money
Performance |
| Timeline |
| Stone Ridge Diversified |
| Aig Government Money |
Stone Ridge and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Aig Government
The main advantage of trading using opposite Stone Ridge and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Stone Ridge vs. Texton Property | Stone Ridge vs. Prudential Real Estate | Stone Ridge vs. Redwood Real Estate | Stone Ridge vs. Vy Clarion Real |
| Aig Government vs. Vanguard Money Market | Aig Government vs. Hewitt Money Market | Aig Government vs. Gabelli Global Financial | Aig Government vs. Franklin Government Money |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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