Correlation Between Pimco Emerging and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Pimco 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 Pimco 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 Pimco Emerging Markets and Stone Harbor Local, you can compare the effects of market volatilities on Pimco 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 Pimco Emerging with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Emerging and Stone Harbor.
Diversification Opportunities for Pimco Emerging and Stone Harbor
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pimco and Stone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Emerging Markets and Stone Harbor Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Local and Pimco 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 Pimco 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 Local has no effect on the direction of Pimco Emerging i.e., Pimco Emerging and Stone Harbor go up and down completely randomly.
Pair Corralation between Pimco Emerging and Stone Harbor
Assuming the 90 days horizon Pimco Emerging Markets is expected to under-perform the Stone Harbor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pimco Emerging Markets is 1.45 times less risky than Stone Harbor. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Stone Harbor Local is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 818.00 in Stone Harbor Local on September 1, 2024 and sell it today you would lose (7.00) from holding Stone Harbor Local or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Emerging Markets vs. Stone Harbor Local
Performance |
| Timeline |
| Pimco Emerging Markets |
| Stone Harbor Local |
Pimco Emerging and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Emerging and Stone Harbor
The main advantage of trading using opposite Pimco Emerging and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco 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.| Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide |
| Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Thrivent High Yield | Stone Harbor vs. Russell 2000 2x |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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