Correlation Between Calvert High and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Calvert High 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 Calvert High and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert High Yield and Stone Harbor Strategic, you can compare the effects of market volatilities on Calvert High 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 Calvert High with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert High and Stone Harbor.
Diversification Opportunities for Calvert High and Stone Harbor
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Calvert and Stone is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Calvert High Yield and Stone Harbor Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Strategic and Calvert High 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 Calvert High Yield 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 Strategic has no effect on the direction of Calvert High i.e., Calvert High and Stone Harbor go up and down completely randomly.
Pair Corralation between Calvert High and Stone Harbor
Assuming the 90 days horizon Calvert High Yield is expected to generate 1.14 times more return on investment than Stone Harbor. However, Calvert High is 1.14 times more volatile than Stone Harbor Strategic. It trades about 0.12 of its potential returns per unit of risk. Stone Harbor Strategic is currently generating about 0.1 per unit of risk. If you would invest 2,140 in Calvert High Yield on September 5, 2024 and sell it today you would earn a total of 359.00 from holding Calvert High Yield or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.36% |
| Values | Daily Returns |
Calvert High Yield vs. Stone Harbor Strategic
Performance |
| Timeline |
| Calvert High Yield |
| Stone Harbor Strategic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Calvert High and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert High and Stone Harbor
The main advantage of trading using opposite Calvert High and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert High 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.| Calvert High vs. Calvert Developed Market | Calvert High vs. Calvert Developed Market | Calvert High vs. Calvert Short Duration | Calvert High vs. Calvert International Responsible |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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