Correlation Between Dws Emerging and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Dws 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 Dws 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 Dws Emerging Markets and Stone Harbor Emerging, you can compare the effects of market volatilities on Dws 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 Dws Emerging with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Emerging and Stone Harbor.
Diversification Opportunities for Dws Emerging and Stone Harbor
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dws and Stone is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dws 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 Dws 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 Dws 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 Dws Emerging i.e., Dws Emerging and Stone Harbor go up and down completely randomly.
Pair Corralation between Dws Emerging and Stone Harbor
Assuming the 90 days horizon Dws Emerging Markets is expected to generate 2.82 times more return on investment than Stone Harbor. However, Dws Emerging is 2.82 times more volatile than Stone Harbor Emerging. It trades about 0.18 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.32 per unit of risk. If you would invest 1,857 in Dws Emerging Markets on September 14, 2024 and sell it today you would earn a total of 50.00 from holding Dws Emerging Markets or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dws Emerging Markets vs. Stone Harbor Emerging
Performance |
| Timeline |
| Dws Emerging Markets |
| Stone Harbor Emerging |
Dws Emerging and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dws Emerging and Stone Harbor
The main advantage of trading using opposite Dws Emerging and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws 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.| Dws Emerging vs. Davenport Small Cap | Dws Emerging vs. Sentinel Small Pany | Dws Emerging vs. Oaktree Diversifiedome | Dws Emerging vs. Wasatch Small Cap |
| Stone Harbor vs. Angel Oak Multi Strategy | Stone Harbor vs. Franklin Emerging Market | Stone Harbor vs. Dws Emerging Markets | Stone Harbor vs. Nasdaq 100 2x Strategy |
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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