Correlation Between Investment and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Investment 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 Investment and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment Of America and Stone Harbor Local, you can compare the effects of market volatilities on Investment 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 Investment with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment and Stone Harbor.
Diversification Opportunities for Investment and Stone Harbor
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Investment and Stone is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Investment Of America 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 Investment 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 Investment Of America 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 Investment i.e., Investment and Stone Harbor go up and down completely randomly.
Pair Corralation between Investment and Stone Harbor
Assuming the 90 days horizon Investment Of America is expected to generate 1.64 times more return on investment than Stone Harbor. However, Investment is 1.64 times more volatile than Stone Harbor Local. It trades about 0.13 of its potential returns per unit of risk. Stone Harbor Local is currently generating about 0.04 per unit of risk. If you would invest 3,853 in Investment Of America on September 14, 2024 and sell it today you would earn a total of 2,457 from holding Investment Of America or generate 63.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Investment Of America vs. Stone Harbor Local
Performance |
| Timeline |
| Investment Of America |
| Stone Harbor Local |
Investment and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investment and Stone Harbor
The main advantage of trading using opposite Investment and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment 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.| Investment vs. Alliancebernstein National Municipal | Investment vs. T Rowe Price | Investment vs. Gamco Global Telecommunications | Investment vs. Ab Impact Municipal |
| Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Stone Harbor Emerging | Stone Harbor vs. Investment Of America | Stone Harbor vs. Environment And Alternative |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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