Correlation Between Stone Harbor and Allspring Income

Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Allspring Income 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 Allspring Income 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 Allspring Income Opportunities, you can compare the effects of market volatilities on Stone Harbor and Allspring Income 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 Allspring Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Allspring Income.

Diversification Opportunities for Stone Harbor and Allspring Income

0.77

Correlation Coefficient

Stone Harbor  Allspring Income

Poor diversification

The 3 months correlation between Stone and Allspring is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Allspring Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allspring Income Opp 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 Allspring Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allspring Income Opp has no effect on the direction of Stone Harbor i.e., Stone Harbor and Allspring Income go up and down completely randomly.

Pair Corralation between Stone Harbor and Allspring Income

Considering the 90-day investment horizon Stone Harbor Emerging is expected to generate 2.45 times more return on investment than Allspring Income. However, Stone Harbor is 2.45 times more volatile than Allspring Income Opportunities. It trades about 0.17 of its potential returns per unit of risk. Allspring Income Opportunities is currently generating about 0.07 per unit of risk. If you would invest  463.00  in Stone Harbor Emerging on December 22, 2024 and sell it today you would earn a total of  53.00  from holding Stone Harbor Emerging or generate 11.45% return on investment over 90 days.

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

Stone Harbor Emerging  vs.  Allspring Income Opportunities

Stone Harbor Emerging

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stone Harbor Emerging are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly inconsistent fundamental indicators, Stone Harbor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Allspring Income Opp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allspring Income Opportunities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Allspring Income is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Stone Harbor and Allspring Income

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

The idea behind Stone Harbor Emerging and Allspring Income Opportunities 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.