Correlation Between Stone Harbor and RiverNorth Specialty
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and RiverNorth Specialty 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 RiverNorth Specialty 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 RiverNorth Specialty Finance, you can compare the effects of market volatilities on Stone Harbor and RiverNorth Specialty 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 RiverNorth Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and RiverNorth Specialty.
Diversification Opportunities for Stone Harbor and RiverNorth Specialty
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stone and RiverNorth is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and RiverNorth Specialty Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Specialty 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 RiverNorth Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Specialty has no effect on the direction of Stone Harbor i.e., Stone Harbor and RiverNorth Specialty go up and down completely randomly.
Pair Corralation between Stone Harbor and RiverNorth Specialty
Considering the 90-day investment horizon Stone Harbor Emerging is expected to generate 4.7 times more return on investment than RiverNorth Specialty. However, Stone Harbor is 4.7 times more volatile than RiverNorth Specialty Finance. It trades about 0.07 of its potential returns per unit of risk. RiverNorth Specialty Finance is currently generating about 0.07 per unit of risk. If you would invest 458.00 in Stone Harbor Emerging on August 31, 2024 and sell it today you would earn a total of 89.00 from holding Stone Harbor Emerging or generate 19.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.45% |
| Values | Daily Returns |
Stone Harbor Emerging vs. RiverNorth Specialty Finance
Performance |
| Timeline |
| Stone Harbor Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RiverNorth Specialty |
Stone Harbor and RiverNorth Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Harbor and RiverNorth Specialty
The main advantage of trading using opposite Stone Harbor and RiverNorth Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, RiverNorth Specialty 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 RiverNorth Specialty will offset losses from the drop in RiverNorth Specialty'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 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Correlations Find global opportunities by holding instruments from different markets |