Correlation Between Stone Harbor and Nuveen Dividend
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Nuveen Dividend 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 Nuveen Dividend 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 Nuveen Dividend Advantage, you can compare the effects of market volatilities on Stone Harbor and Nuveen Dividend 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 Nuveen Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Nuveen Dividend.
Diversification Opportunities for Stone Harbor and Nuveen Dividend
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stone and Nuveen is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Nuveen Dividend Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dividend Advantage 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 Nuveen Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dividend Advantage has no effect on the direction of Stone Harbor i.e., Stone Harbor and Nuveen Dividend go up and down completely randomly.
Pair Corralation between Stone Harbor and Nuveen Dividend
Considering the 90-day investment horizon Stone Harbor is expected to generate 11.67 times less return on investment than Nuveen Dividend. In addition to that, Stone Harbor is 3.49 times more volatile than Nuveen Dividend Advantage. It trades about 0.01 of its total potential returns per unit of risk. Nuveen Dividend Advantage is currently generating about 0.26 per unit of volatility. If you would invest 1,202 in Nuveen Dividend Advantage on September 12, 2024 and sell it today you would earn a total of 26.00 from holding Nuveen Dividend Advantage or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Harbor Emerging vs. Nuveen Dividend Advantage
Performance |
| Timeline |
| Stone Harbor Emerging |
| Nuveen Dividend Advantage |
Stone Harbor and Nuveen Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Harbor and Nuveen Dividend
The main advantage of trading using opposite Stone Harbor and Nuveen Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Nuveen Dividend 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 Nuveen Dividend will offset losses from the drop in Nuveen Dividend's long position.| Stone Harbor vs. Oxford Lane Capital | Stone Harbor vs. Orchid Island Capital | Stone Harbor vs. Guggenheim Strategic Opportunities |
| Nuveen Dividend vs. Oxford Lane Capital | Nuveen Dividend vs. Orchid Island Capital | Nuveen Dividend vs. Guggenheim Strategic Opportunities | Nuveen Dividend 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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