Correlation Between SPDR Bloomberg and Stone Ridge

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

By analyzing existing cross correlation between SPDR Bloomberg International and Stone Ridge 2056, you can compare the effects of market volatilities on SPDR Bloomberg 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 SPDR Bloomberg with a short position of Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and Stone Ridge.

Diversification Opportunities for SPDR Bloomberg and Stone Ridge

-0.79

Correlation Coefficient

SPDR Bloomberg  Stone Ridge

Pay attention - limited upside

The 3 months correlation between SPDR and Stone is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg International and Stone Ridge 2056 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2056 and SPDR Bloomberg 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 SPDR Bloomberg International 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 2056 has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and Stone Ridge go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and Stone Ridge

Given the investment horizon of 90 days SPDR Bloomberg International is expected to generate 1.02 times more return on investment than Stone Ridge. However, SPDR Bloomberg is 1.02 times more volatile than Stone Ridge 2056. It trades about 0.2 of its potential returns per unit of risk. Stone Ridge 2056 is currently generating about -0.09 per unit of risk. If you would invest  2,875  in SPDR Bloomberg International on March 1, 2025 and sell it today you would earn a total of  252.00  from holding SPDR Bloomberg International or generate 8.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SPDR Bloomberg International  vs.  Stone Ridge 2056

SPDR Bloomberg Inter

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg International are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, SPDR Bloomberg may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Stone Ridge 2056

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stone Ridge 2056 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Stone Ridge is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SPDR Bloomberg and Stone Ridge

The main advantage of trading using opposite SPDR Bloomberg and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg 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 SPDR Bloomberg International and Stone Ridge 2056 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.