Correlation Between Stone Ridge and Virtus Ceredex
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Virtus Ceredex 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 Virtus Ceredex 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 Virtus Ceredex Small Cap, you can compare the effects of market volatilities on Stone Ridge and Virtus Ceredex 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 Virtus Ceredex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Virtus Ceredex.
Diversification Opportunities for Stone Ridge and Virtus Ceredex
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stone and Virtus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Virtus Ceredex Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Ceredex Small 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 Virtus Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Ceredex Small has no effect on the direction of Stone Ridge i.e., Stone Ridge and Virtus Ceredex go up and down completely randomly.
Pair Corralation between Stone Ridge and Virtus Ceredex
Assuming the 90 days horizon Stone Ridge is expected to generate 1.23 times less return on investment than Virtus Ceredex. But when comparing it to its historical volatility, Stone Ridge Diversified is 5.88 times less risky than Virtus Ceredex. It trades about 0.17 of its potential returns per unit of risk. Virtus Ceredex Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 782.00 in Virtus Ceredex Small Cap on September 12, 2024 and sell it today you would earn a total of 100.00 from holding Virtus Ceredex Small Cap or generate 12.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Virtus Ceredex Small Cap
Performance |
| Timeline |
| Stone Ridge Diversified |
| Virtus Ceredex Small |
Stone Ridge and Virtus Ceredex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Virtus Ceredex
The main advantage of trading using opposite Stone Ridge and Virtus Ceredex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Virtus Ceredex 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 Virtus Ceredex will offset losses from the drop in Virtus Ceredex's long position.| Stone Ridge vs. Blackrock Alternative Capital | Stone Ridge vs. Aqr Style Premia | Stone Ridge vs. Goldman Sachs Absolute | Stone Ridge vs. Aquagold International |
| Virtus Ceredex vs. Wilmington Diversified Income | Virtus Ceredex vs. Federated Hermes Conservative | Virtus Ceredex vs. Stone Ridge Diversified | Virtus Ceredex vs. Tax Free Conservative Income |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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