Correlation Between Valic Company and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Valic Company and Stone Ridge 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 Valic Company and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Stone Ridge Diversified, you can compare the effects of market volatilities on Valic Company and Stone Ridge 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 Valic Company with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Stone Ridge.
Diversification Opportunities for Valic Company and Stone Ridge
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valic and Stone is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified and Valic Company 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 Valic Company I are associated (or correlated) with Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Valic Company i.e., Valic Company and Stone Ridge go up and down completely randomly.
Pair Corralation between Valic Company and Stone Ridge
Assuming the 90 days horizon Valic Company I is expected to generate 2.1 times more return on investment than Stone Ridge. However, Valic Company is 2.1 times more volatile than Stone Ridge Diversified. It trades about 0.15 of its potential returns per unit of risk. Stone Ridge Diversified is currently generating about 0.12 per unit of risk. If you would invest 959.00 in Valic Company I on October 25, 2024 and sell it today you would earn a total of 211.00 from holding Valic Company I or generate 22.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Stone Ridge Diversified
Performance |
| Timeline |
| Valic Company I |
| Stone Ridge Diversified |
Valic Company and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Stone Ridge
The main advantage of trading using opposite Valic Company and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Valic Company vs. Vanguard Wellesley Income | Valic Company vs. The Hartford Balanced | Valic Company vs. HUMANA INC | Valic Company vs. Aquagold International |
| Stone Ridge vs. Blackrock Alternative Capital | Stone Ridge vs. Blackrock Systematic Multi Strategy | Stone Ridge vs. HUMANA INC | Stone Ridge vs. Aquagold International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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