Correlation Between Nuveen New and Stone Harbor

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

By analyzing existing cross correlation between Nuveen New York and Stone Harbor Emerging, you can compare the effects of market volatilities on Nuveen New and Stone Harbor 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 Nuveen New with a short position of Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Stone Harbor.

Diversification Opportunities for Nuveen New and Stone Harbor

0.52

Correlation Coefficient

Nuveen New  Stone Harbor

Very weak diversification

The 3 months correlation between Nuveen and Stone is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging and Nuveen New 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 Nuveen New York are associated (or correlated) with Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of Nuveen New i.e., Nuveen New and Stone Harbor go up and down completely randomly.

Pair Corralation between Nuveen New and Stone Harbor

Considering the 90-day investment horizon Nuveen New York is expected to under-perform the Stone Harbor. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen New York is 1.99 times less risky than Stone Harbor. The fund trades about -0.01 of its potential returns per unit of risk. The Stone Harbor Emerging is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  455.00  in Stone Harbor Emerging on December 28, 2024 and sell it today you would earn a total of  53.00  from holding Stone Harbor Emerging or generate 11.65% return on investment over 90 days.

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

Nuveen New York  vs.  Stone Harbor Emerging

Nuveen New York

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen New York has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Nuveen New is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 14 (%) 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.

Pair Trading with Nuveen New and Stone Harbor

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

The idea behind Nuveen New York and Stone Harbor Emerging 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.