Correlation Between Stone Harbor and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Stone Harbor and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Dow Jones.
Diversification Opportunities for Stone Harbor and Dow Jones
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stone and Dow is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Stone Harbor i.e., Stone Harbor and Dow Jones go up and down completely randomly.
Pair Corralation between Stone Harbor and Dow Jones
Considering the 90-day investment horizon Stone Harbor Emerging is expected to generate 2.51 times more return on investment than Dow Jones. However, Stone Harbor is 2.51 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 332.00 in Stone Harbor Emerging on August 31, 2024 and sell it today you would earn a total of 171.00 from holding Stone Harbor Emerging or generate 51.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Stone Harbor Emerging vs. Dow Jones Industrial
Performance |
| Timeline |
Stone Harbor and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Stone Harbor Emerging
Pair trading matchups for Stone Harbor
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Stone Harbor and Dow Jones
The main advantage of trading using opposite Stone Harbor and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Stone Harbor vs. Virtus Global Multi | Stone Harbor vs. Aberdeen Global IF | Stone Harbor vs. Cushing Mlp Total | Stone Harbor vs. Aberdeen Asia Pacific If |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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