Correlation Between Stone Ridge and Amg Renaissance
Can any of the company-specific risk be diversified away by investing in both Stone Ridge and Amg Renaissance 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 Amg Renaissance 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 Amg Renaissance Large, you can compare the effects of market volatilities on Stone Ridge and Amg Renaissance 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 Amg Renaissance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Amg Renaissance.
Diversification Opportunities for Stone Ridge and Amg Renaissance
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stone and Amg is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified and Amg Renaissance Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Renaissance Large 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 Amg Renaissance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Renaissance Large has no effect on the direction of Stone Ridge i.e., Stone Ridge and Amg Renaissance go up and down completely randomly.
Pair Corralation between Stone Ridge and Amg Renaissance
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 0.19 times more return on investment than Amg Renaissance. However, Stone Ridge Diversified is 5.32 times less risky than Amg Renaissance. It trades about 0.06 of its potential returns per unit of risk. Amg Renaissance Large is currently generating about -0.07 per unit of risk. If you would invest 1,054 in Stone Ridge Diversified on December 18, 2024 and sell it today you would earn a total of 7.00 from holding Stone Ridge Diversified or generate 0.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Stone Ridge Diversified vs. Amg Renaissance Large
Performance |
Timeline |
Stone Ridge Diversified |
Amg Renaissance Large |
Stone Ridge and Amg Renaissance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stone Ridge and Amg Renaissance
The main advantage of trading using opposite Stone Ridge and Amg Renaissance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Amg Renaissance 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 Amg Renaissance will offset losses from the drop in Amg Renaissance's long position.Stone Ridge vs. Pace High Yield | Stone Ridge vs. Gmo High Yield | Stone Ridge vs. Credit Suisse Floating | Stone Ridge vs. Rivernorthoaktree High 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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