Correlation Between RiverNorth Specialty and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both RiverNorth Specialty 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 RiverNorth Specialty and Stone Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RiverNorth Specialty Finance and Stone Harbor Emerging, you can compare the effects of market volatilities on RiverNorth Specialty 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 RiverNorth Specialty with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiverNorth Specialty and Stone Harbor.
Diversification Opportunities for RiverNorth Specialty and Stone Harbor
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between RiverNorth and Stone is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorth Specialty Finance 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 RiverNorth Specialty 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 RiverNorth Specialty Finance 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 RiverNorth Specialty i.e., RiverNorth Specialty and Stone Harbor go up and down completely randomly.
Pair Corralation between RiverNorth Specialty and Stone Harbor
If you would invest 1,473 in RiverNorth Specialty Finance on August 28, 2024 and sell it today you would earn a total of 47.00 from holding RiverNorth Specialty Finance or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
RiverNorth Specialty Finance vs. Stone Harbor Emerging
Performance |
| Timeline |
| RiverNorth Specialty |
| Stone Harbor Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RiverNorth Specialty and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RiverNorth Specialty and Stone Harbor
The main advantage of trading using opposite RiverNorth Specialty and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiverNorth Specialty 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.The idea behind RiverNorth Specialty Finance and Stone Harbor Emerging pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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