Correlation Between Stone Ridge and Simplify Interest

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

By analyzing existing cross correlation between Stone Ridge 2050 and Simplify Interest Rate, you can compare the effects of market volatilities on Stone Ridge and Simplify Interest 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 Simplify Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Simplify Interest.

Diversification Opportunities for Stone Ridge and Simplify Interest

-0.59

Correlation Coefficient

Stone Ridge  Simplify Interest

Excellent diversification

The 3 months correlation between Stone and Simplify is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge 2050 and Simplify Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Interest Rate 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 2050 are associated (or correlated) with Simplify Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Interest Rate has no effect on the direction of Stone Ridge i.e., Stone Ridge and Simplify Interest go up and down completely randomly.

Pair Corralation between Stone Ridge and Simplify Interest

Given the investment horizon of 90 days Stone Ridge is expected to generate 19.12 times less return on investment than Simplify Interest. But when comparing it to its historical volatility, Stone Ridge 2050 is 5.83 times less risky than Simplify Interest. It trades about 0.03 of its potential returns per unit of risk. Simplify Interest Rate is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,286  in Simplify Interest Rate on April 25, 2025 and sell it today you would earn a total of  722.00  from holding Simplify Interest Rate or generate 13.66% return on investment over 90 days.

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

Stone Ridge 2050  vs.  Simplify Interest Rate

Stone Ridge 2050

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stone Ridge 2050 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Stone Ridge is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Simplify Interest Rate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Interest Rate are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Simplify Interest showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stone Ridge and Simplify Interest

The main advantage of trading using opposite Stone Ridge and Simplify Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge position performs unexpectedly, Simplify Interest 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 Simplify Interest will offset losses from the drop in Simplify Interest's long position.

The idea behind Stone Ridge 2050 and Simplify Interest Rate 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.