Correlation Between Stone Harbor and North American
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and North American 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 North American 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 North American Financial, you can compare the effects of market volatilities on Stone Harbor and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and North American.
Diversification Opportunities for Stone Harbor and North American
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stone and North is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and North American Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Financial 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Financial has no effect on the direction of Stone Harbor i.e., Stone Harbor and North American go up and down completely randomly.
Pair Corralation between Stone Harbor and North American
Considering the 90-day investment horizon Stone Harbor is expected to generate 8.61 times less return on investment than North American. But when comparing it to its historical volatility, Stone Harbor Emerging is 5.9 times less risky than North American. It trades about 0.05 of its potential returns per unit of risk. North American Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 306.00 in North American Financial on November 2, 2024 and sell it today you would earn a total of 211.00 from holding North American Financial or generate 68.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 32.94% |
| Values | Daily Returns |
Stone Harbor Emerging vs. North American Financial
Performance |
| Timeline |
| Stone Harbor Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| North American Financial |
Stone Harbor and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Harbor and North American
The main advantage of trading using opposite Stone Harbor and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| Stone Harbor vs. Aberdeen Global IF | Stone Harbor vs. Clough Global Opportunities | Stone Harbor vs. RiverNorthDoubleLine Strategic Opportunity | Stone Harbor vs. Cornerstone Strategic Return |
| North American vs. Financial 15 Split | North American vs. Clough Global Ef | North American vs. Morgan Stanley India | North American vs. SEI Investments |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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