Correlation Between Stone Harbor and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Cornerstone Strategic 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 Harbor and Cornerstone Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Harbor Emerging and Cornerstone Strategic Return, you can compare the effects of market volatilities on Stone Harbor and Cornerstone Strategic 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 Harbor with a short position of Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Cornerstone Strategic.
Diversification Opportunities for Stone Harbor and Cornerstone Strategic
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stone and Cornerstone is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic and Stone Harbor 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 Harbor Emerging are associated (or correlated) with Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Stone Harbor i.e., Stone Harbor and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Stone Harbor and Cornerstone Strategic
Considering the 90-day investment horizon Stone Harbor Emerging is expected to generate 1.13 times more return on investment than Cornerstone Strategic. However, Stone Harbor is 1.13 times more volatile than Cornerstone Strategic Return. It trades about 0.07 of its potential returns per unit of risk. Cornerstone Strategic Return is currently generating about 0.06 per unit of risk. If you would invest 373.00 in Stone Harbor Emerging on September 12, 2024 and sell it today you would earn a total of 134.00 from holding Stone Harbor Emerging or generate 35.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Harbor Emerging vs. Cornerstone Strategic Return
Performance |
| Timeline |
| Stone Harbor Emerging |
| Cornerstone Strategic |
Stone Harbor and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Harbor and Cornerstone Strategic
The main advantage of trading using opposite Stone Harbor and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.| Stone Harbor vs. Oxford Lane Capital | Stone Harbor vs. Orchid Island Capital | Stone Harbor vs. Guggenheim Strategic Opportunities |
| Cornerstone Strategic vs. Oxford Lane Capital | Cornerstone Strategic vs. Orchid Island Capital | Cornerstone Strategic vs. Guggenheim Strategic Opportunities | Cornerstone Strategic vs. Stone Harbor Emerging |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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