Correlation Between Johcm Emerging and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Johcm Emerging 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 Johcm Emerging and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johcm Emerging Markets and Stone Harbor Emerging, you can compare the effects of market volatilities on Johcm Emerging 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 Johcm Emerging with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johcm Emerging and Stone Harbor.
Diversification Opportunities for Johcm Emerging and Stone Harbor
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Johcm and Stone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Johcm Emerging Markets 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 Johcm Emerging 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 Johcm Emerging Markets 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 Johcm Emerging i.e., Johcm Emerging and Stone Harbor go up and down completely randomly.
Pair Corralation between Johcm Emerging and Stone Harbor
Assuming the 90 days horizon Johcm Emerging Markets is expected to generate 5.58 times more return on investment than Stone Harbor. However, Johcm Emerging is 5.58 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 0.25 per unit of risk. If you would invest 1,031 in Johcm Emerging Markets on September 4, 2024 and sell it today you would earn a total of 126.00 from holding Johcm Emerging Markets or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johcm Emerging Markets vs. Stone Harbor Emerging
Performance |
| Timeline |
| Johcm Emerging Markets |
| Stone Harbor Emerging |
Johcm Emerging and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johcm Emerging and Stone Harbor
The main advantage of trading using opposite Johcm Emerging and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johcm Emerging 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.| Johcm Emerging vs. Regnan Uk Umbrella | Johcm Emerging vs. Tswhgyldbdinstl | Johcm Emerging vs. Tsw Emerging Markets | Johcm Emerging vs. Johcm Emerging Markets |
| Stone Harbor vs. Stone Harbor Local | Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Q3 All Weather Sector | Stone Harbor vs. Nationwide Investor Destinations |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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