Correlation Between Stone Harbor and Putnam High
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Putnam High 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 Putnam High 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 Putnam High Income, you can compare the effects of market volatilities on Stone Harbor and Putnam High 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 Putnam High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Putnam High.
Diversification Opportunities for Stone Harbor and Putnam High
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stone and Putnam is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Putnam High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam High Income 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 Putnam High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam High Income has no effect on the direction of Stone Harbor i.e., Stone Harbor and Putnam High go up and down completely randomly.
Pair Corralation between Stone Harbor and Putnam High
Considering the 90-day investment horizon Stone Harbor is expected to generate 8.12 times less return on investment than Putnam High. In addition to that, Stone Harbor is 2.46 times more volatile than Putnam High Income. It trades about 0.01 of its total potential returns per unit of risk. Putnam High Income is currently generating about 0.13 per unit of volatility. If you would invest 675.00 in Putnam High Income on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Putnam High Income or generate 1.48% 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. Putnam High Income
Performance |
| Timeline |
| Stone Harbor Emerging |
| Putnam High Income |
Stone Harbor and Putnam High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Harbor and Putnam High
The main advantage of trading using opposite Stone Harbor and Putnam High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Putnam High 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 Putnam High will offset losses from the drop in Putnam High's long position.| Stone Harbor vs. Oxford Lane Capital | Stone Harbor vs. Orchid Island Capital | Stone Harbor vs. Guggenheim Strategic Opportunities |
| Putnam High vs. Oxford Lane Capital | Putnam High vs. Orchid Island Capital | Putnam High vs. Guggenheim Strategic Opportunities | Putnam High 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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