Correlation Between Stone Harbor and Pgim Global

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

Diversification Opportunities for Stone Harbor and Pgim Global

0.24

Correlation Coefficient

Stone Harbor  Pgim Global

Modest diversification

The 3 months correlation between Stone and Pgim is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Pgim Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Global High 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 Pgim Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Global High has no effect on the direction of Stone Harbor i.e., Stone Harbor and Pgim Global go up and down completely randomly.

Pair Corralation between Stone Harbor and Pgim Global

Considering the 90-day investment horizon Stone Harbor Emerging is expected to generate 2.27 times more return on investment than Pgim Global. However, Stone Harbor is 2.27 times more volatile than Pgim Global High. It trades about 0.06 of its potential returns per unit of risk. Pgim Global High is currently generating about 0.13 per unit of risk. If you would invest  397.00  in Stone Harbor Emerging on October 7, 2024 and sell it today you would earn a total of  91.00  from holding Stone Harbor Emerging or generate 22.92% return on investment over 90 days.

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

Stone Harbor Emerging  vs.  Pgim Global High

Stone Harbor Emerging

Risk-Adjusted Performance

0 of 100

Very 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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pgim Global High

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Global High are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Pgim Global 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 Pgim Global

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

The idea behind Stone Harbor Emerging and Pgim Global High 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..