Correlation Between Stone Harbor and Financial

Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Financial 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 Financial 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 Financial 15 Split, you can compare the effects of market volatilities on Stone Harbor and Financial 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Financial.

Diversification Opportunities for Stone Harbor and Financial

0.61

Correlation Coefficient

Stone Harbor  Financial

Poor diversification

The 3 months correlation between Stone and Financial is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Stone Harbor i.e., Stone Harbor and Financial go up and down completely randomly.

Pair Corralation between Stone Harbor and Financial

If you would invest  623.00  in Financial 15 Split on September 1, 2024 and sell it today you would earn a total of  105.00  from holding Financial 15 Split or generate 16.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.67%
Values	Daily Returns

Stone Harbor Emerging  vs.  Financial 15 Split

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 fairly strong fundamental indicators, Stone Harbor is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Financial 15 Split

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stone Harbor and Financial

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

The idea behind Stone Harbor Emerging and Financial 15 Split 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.