Correlation Between NYSE Composite and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stone Harbor Emerging, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stone Harbor.
Diversification Opportunities for NYSE Composite and Stone Harbor
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Stone is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Stone Harbor go up and down completely randomly.
Pair Corralation between NYSE Composite and Stone Harbor
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.5 times less return on investment than Stone Harbor. But when comparing it to its historical volatility, NYSE Composite is 2.23 times less risky than Stone Harbor. It trades about 0.11 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 482.00 in Stone Harbor Emerging on August 31, 2024 and sell it today you would earn a total of 65.00 from holding Stone Harbor Emerging or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
NYSE Composite vs. Stone Harbor Emerging
Performance |
| Timeline |
NYSE Composite and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stone Harbor Emerging
Pair trading matchups for Stone Harbor
Pair Trading with NYSE Composite and Stone Harbor
The main advantage of trading using opposite NYSE Composite and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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