Correlation Between IShares and Stone Ridge

Can any of the company-specific risk be diversified away by investing in both IShares 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 IShares and Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IShares and Stone Ridge 2054, you can compare the effects of market volatilities on IShares 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 IShares with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares and Stone Ridge.

Diversification Opportunities for IShares and Stone Ridge

-0.74

Correlation Coefficient

IShares  Stone Ridge

Pay attention - limited upside

The 3 months correlation between IShares and Stone is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding IShares and Stone Ridge 2054 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2054 and IShares 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 IShares 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 2054 has no effect on the direction of IShares i.e., IShares and Stone Ridge go up and down completely randomly.

Pair Corralation between IShares and Stone Ridge

If you would invest  2,478  in IShares on September 2, 2024 and sell it today you would earn a total of  0.00  from holding IShares or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.67%
Values	Daily Returns

IShares  vs.  Stone Ridge 2054

IShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IShares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IShares is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Stone Ridge 2054

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stone Ridge 2054 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Stone Ridge is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with IShares and Stone Ridge

The main advantage of trading using opposite IShares and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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.

The idea behind IShares and Stone Ridge 2054 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.