Correlation Between Stone Harbor and Frontier Mfg
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Frontier Mfg 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 Stone Harbor and Frontier Mfg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Harbor Local and Frontier Mfg Global, you can compare the effects of market volatilities on Stone Harbor and Frontier Mfg 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 Stone Harbor with a short position of Frontier Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Frontier Mfg.
Diversification Opportunities for Stone Harbor and Frontier Mfg
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stone and Frontier is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Local and Frontier Mfg Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Mfg Global and Stone Harbor 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 Stone Harbor Local are associated (or correlated) with Frontier Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Mfg Global has no effect on the direction of Stone Harbor i.e., Stone Harbor and Frontier Mfg go up and down completely randomly.
Pair Corralation between Stone Harbor and Frontier Mfg
Assuming the 90 days horizon Stone Harbor Local is expected to under-perform the Frontier Mfg. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stone Harbor Local is 1.32 times less risky than Frontier Mfg. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Frontier Mfg Global is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,398 in Frontier Mfg Global on September 3, 2024 and sell it today you would earn a total of 161.00 from holding Frontier Mfg Global or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Harbor Local vs. Frontier Mfg Global
Performance |
| Timeline |
| Stone Harbor Local |
| Frontier Mfg Global |
Stone Harbor and Frontier Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Harbor and Frontier Mfg
The main advantage of trading using opposite Stone Harbor and Frontier Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Frontier Mfg 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 Frontier Mfg will offset losses from the drop in Frontier Mfg's long position.| Stone Harbor vs. HUMANA INC | Stone Harbor vs. Aquagold International | Stone Harbor vs. Barloworld Ltd ADR | Stone Harbor vs. Morningstar Unconstrained Allocation |
| Frontier Mfg vs. Astor Longshort Fund | Frontier Mfg vs. Barings Active Short | Frontier Mfg vs. Rbc Short Duration | Frontier Mfg vs. Calvert Short Duration |
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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