Correlation Between Stoneridge and Monro Muffler
Can any of the company-specific risk be diversified away by investing in both Stoneridge and Monro Muffler 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 Stoneridge and Monro Muffler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoneridge and Monro Muffler Brake, you can compare the effects of market volatilities on Stoneridge and Monro Muffler 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 Stoneridge with a short position of Monro Muffler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoneridge and Monro Muffler.
Diversification Opportunities for Stoneridge and Monro Muffler
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stoneridge and Monro is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Monro Muffler Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monro Muffler Brake and Stoneridge 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 Stoneridge are associated (or correlated) with Monro Muffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monro Muffler Brake has no effect on the direction of Stoneridge i.e., Stoneridge and Monro Muffler go up and down completely randomly.
Pair Corralation between Stoneridge and Monro Muffler
Considering the 90-day investment horizon Stoneridge is expected to under-perform the Monro Muffler. In addition to that, Stoneridge is 1.28 times more volatile than Monro Muffler Brake. It trades about -0.07 of its total potential returns per unit of risk. Monro Muffler Brake is currently generating about -0.06 per unit of volatility. If you would invest 4,518 in Monro Muffler Brake on November 1, 2024 and sell it today you would lose (2,558) from holding Monro Muffler Brake or give up 56.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoneridge vs. Monro Muffler Brake
Performance |
| Timeline |
| Stoneridge |
| Monro Muffler Brake |
Stoneridge and Monro Muffler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoneridge and Monro Muffler
The main advantage of trading using opposite Stoneridge and Monro Muffler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge position performs unexpectedly, Monro Muffler 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 Monro Muffler will offset losses from the drop in Monro Muffler's long position.| Stoneridge vs. Monro Muffler Brake | Stoneridge vs. Motorcar Parts of | Stoneridge vs. Standard Motor Products | Stoneridge vs. Douglas Dynamics |
| Monro Muffler vs. Motorcar Parts of | Monro Muffler vs. Standard Motor Products | Monro Muffler vs. Stoneridge | Monro Muffler vs. Douglas Dynamics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |