Correlation Between Amg Frontier and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Amg Frontier 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 Amg Frontier and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Frontier Small and Stone Ridge Diversified, you can compare the effects of market volatilities on Amg Frontier 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 Amg Frontier with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Frontier and Stone Ridge.
Diversification Opportunities for Amg Frontier and Stone Ridge
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amg and Stone is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Amg Frontier Small 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 Amg Frontier 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 Amg Frontier Small 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 Amg Frontier i.e., Amg Frontier and Stone Ridge go up and down completely randomly.
Pair Corralation between Amg Frontier and Stone Ridge
Assuming the 90 days horizon Amg Frontier Small is expected to under-perform the Stone Ridge. In addition to that, Amg Frontier is 7.62 times more volatile than Stone Ridge Diversified. It trades about -0.23 of its total potential returns per unit of risk. Stone Ridge Diversified is currently generating about 0.32 per unit of volatility. If you would invest 1,055 in Stone Ridge Diversified on October 11, 2024 and sell it today you would earn a total of 14.00 from holding Stone Ridge Diversified or generate 1.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Amg Frontier Small vs. Stone Ridge Diversified
Performance |
Timeline |
Amg Frontier Small |
Stone Ridge Diversified |
Amg Frontier and Stone Ridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amg Frontier and Stone Ridge
The main advantage of trading using opposite Amg Frontier and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Frontier 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.Amg Frontier vs. Stone Ridge Diversified | Amg Frontier vs. Guggenheim Diversified Income | Amg Frontier vs. Manning Napier Diversified | Amg Frontier vs. Allianzgi Diversified Income |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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