Correlation Between Stone Harbor and Blackrock International

Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Blackrock International 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 Blackrock International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stone Harbor Emerging and Blackrock International Growth, you can compare the effects of market volatilities on Stone Harbor and Blackrock International 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 Blackrock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Blackrock International.

Diversification Opportunities for Stone Harbor and Blackrock International

0.45

Correlation Coefficient

Stone Harbor  Blackrock International

Very weak diversification

The 3 months correlation between Stone and Blackrock is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International 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 Emerging are associated (or correlated) with Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of Stone Harbor i.e., Stone Harbor and Blackrock International go up and down completely randomly.

Pair Corralation between Stone Harbor and Blackrock International

Considering the 90-day investment horizon Stone Harbor Emerging is expected to generate 2.0 times more return on investment than Blackrock International. However, Stone Harbor is 2.0 times more volatile than Blackrock International Growth. It trades about 0.07 of its potential returns per unit of risk. Blackrock International Growth is currently generating about 0.06 per unit of risk. If you would invest  310.00  in Stone Harbor Emerging on September 12, 2024 and sell it today you would earn a total of  197.00  from holding Stone Harbor Emerging or generate 63.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Stone Harbor Emerging  vs.  Blackrock International Growth

Stone Harbor Emerging

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Stone Harbor Emerging has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable fundamental indicators, Stone Harbor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Blackrock International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Blackrock International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stone Harbor and Blackrock International

The main advantage of trading using opposite Stone Harbor and Blackrock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Blackrock International 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 Blackrock International will offset losses from the drop in Blackrock International's long position.

The idea behind Stone Harbor Emerging and Blackrock International Growth 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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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.