Correlation Between Western Asset and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Stone Harbor Emerging, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Stone Harbor.
Diversification Opportunities for Western Asset and Stone Harbor
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Stone is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High 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 Western Asset 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 Western Asset High 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 Western Asset i.e., Western Asset and Stone Harbor go up and down completely randomly.
Pair Corralation between Western Asset and Stone Harbor
If you would invest 1,196 in Western Asset High on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Western Asset High or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Western Asset High vs. Stone Harbor Emerging
Performance |
| Timeline |
| Western Asset High |
| Stone Harbor Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Stone Harbor
The main advantage of trading using opposite Western Asset and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset High | Western Asset vs. Voya Global Advantage | Western Asset vs. Voya Global Equity |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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