Correlation Between Stone Ridge and Transamerica Capital
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Transamerica Capital 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 Transamerica Capital 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 Transamerica Capital Growth, you can compare the effects of market volatilities on Stone Ridge and Transamerica Capital 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 Transamerica Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Transamerica Capital.
Diversification Opportunities for Stone Ridge and Transamerica Capital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stone and Transamerica is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Transamerica Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Capital 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 Transamerica Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Capital has no effect on the direction of Stone Ridge i.e., Stone Ridge and Transamerica Capital go up and down completely randomly.
Pair Corralation between Stone Ridge and Transamerica Capital
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 0.1 times more return on investment than Transamerica Capital. However, Stone Ridge Diversified is 9.81 times less risky than Transamerica Capital. It trades about 0.28 of its potential returns per unit of risk. Transamerica Capital Growth is currently generating about -0.08 per unit of risk. If you would invest 1,055 in Stone Ridge Diversified on October 10, 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Transamerica Capital Growth
Performance |
| Timeline |
| Stone Ridge Diversified |
| Transamerica Capital |
Stone Ridge and Transamerica Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Transamerica Capital
The main advantage of trading using opposite Stone Ridge and Transamerica Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Transamerica Capital 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 Transamerica Capital will offset losses from the drop in Transamerica Capital's long position.| Stone Ridge vs. T Rowe Price | Stone Ridge vs. Mairs Power Growth | Stone Ridge vs. Mid Cap Growth | Stone Ridge vs. Morningstar Aggressive Growth |
| Transamerica Capital vs. Inverse Emerging Markets | Transamerica Capital vs. Saat Market Growth | Transamerica Capital vs. Pnc Emerging Markets | Transamerica Capital vs. Alphacentric Hedged Market |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |