Correlation Between Financial and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Financial and Stone Harbor 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 Financial and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Stone Harbor Emerging, you can compare the effects of market volatilities on Financial and Stone Harbor 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 Financial with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Stone Harbor.
Diversification Opportunities for Financial and Stone Harbor
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Financial and Stone is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging and Financial 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 Financial 15 Split are associated (or correlated) with Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of Financial i.e., Financial and Stone Harbor go up and down completely randomly.
Pair Corralation between Financial and Stone Harbor
Assuming the 90 days horizon Financial 15 Split is expected to generate 6.43 times more return on investment than Stone Harbor. However, Financial is 6.43 times more volatile than Stone Harbor Emerging. It trades about 0.06 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.05 per unit of risk. If you would invest 523.00 in Financial 15 Split on November 2, 2024 and sell it today you would earn a total of 142.00 from holding Financial 15 Split or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 66.8% |
| Values | Daily Returns |
Financial 15 Split vs. Stone Harbor Emerging
Performance |
| Timeline |
| Financial 15 Split |
| Stone Harbor Emerging |
Financial and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and Stone Harbor
The main advantage of trading using opposite Financial and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Financial vs. SEI Investments | Financial vs. Oxford Lane Capital | Financial vs. Blackstone Group | Financial vs. North American Financial |
| 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 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |