Correlation Between Growth Fund and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Stone Harbor 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 Growth Fund and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Stone Harbor Local, you can compare the effects of market volatilities on Growth Fund and Stone Harbor 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 Growth Fund with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Stone Harbor.
Diversification Opportunities for Growth Fund and Stone Harbor
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Stone is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Stone Harbor Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Local and Growth Fund 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 Growth Fund Of are associated (or correlated) with Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Local has no effect on the direction of Growth Fund i.e., Growth Fund and Stone Harbor go up and down completely randomly.
Pair Corralation between Growth Fund and Stone Harbor
Assuming the 90 days horizon Growth Fund Of is expected to under-perform the Stone Harbor. In addition to that, Growth Fund is 2.4 times more volatile than Stone Harbor Local. It trades about -0.2 of its total potential returns per unit of risk. Stone Harbor Local is currently generating about 0.02 per unit of volatility. If you would invest 811.00 in Stone Harbor Local on December 1, 2024 and sell it today you would earn a total of 1.00 from holding Stone Harbor Local or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Growth Fund Of vs. Stone Harbor Local
Performance |
| Timeline |
| Growth Fund |
| Stone Harbor Local |
Growth Fund and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Stone Harbor
The main advantage of trading using opposite Growth Fund and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Stone Harbor 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 Harbor will offset losses from the drop in Stone Harbor's long position.| Growth Fund vs. Upright Assets Allocation | Growth Fund vs. T Rowe Price | Growth Fund vs. The Hartford Servative | Growth Fund vs. Guidemark Large Cap |
| Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Emerging Markets Value | Stone Harbor vs. Mfs Blended Research |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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