Correlation Between Stone Harbor and Ophmr Eml
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Ophmr Eml 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 Ophmr Eml into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Harbor Local and Ophmr Eml Dbt, you can compare the effects of market volatilities on Stone Harbor and Ophmr Eml 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 Ophmr Eml. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Ophmr Eml.
Diversification Opportunities for Stone Harbor and Ophmr Eml
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Stone and Ophmr is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Local and Ophmr Eml Dbt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ophmr Eml Dbt 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 Local are associated (or correlated) with Ophmr Eml. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ophmr Eml Dbt has no effect on the direction of Stone Harbor i.e., Stone Harbor and Ophmr Eml go up and down completely randomly.
Pair Corralation between Stone Harbor and Ophmr Eml
Assuming the 90 days horizon Stone Harbor Local is expected to generate 0.92 times more return on investment than Ophmr Eml. However, Stone Harbor Local is 1.09 times less risky than Ophmr Eml. It trades about -0.09 of its potential returns per unit of risk. Ophmr Eml Dbt is currently generating about -0.1 per unit of risk. If you would invest 820.00 in Stone Harbor Local on January 25, 2024 and sell it today you would lose (20.00) from holding Stone Harbor Local or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stone Harbor Local vs. Ophmr Eml Dbt
Performance |
| Timeline |
| Stone Harbor Local |
| Ophmr Eml Dbt |
Stone Harbor and Ophmr Eml Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Harbor and Ophmr Eml
The main advantage of trading using opposite Stone Harbor and Ophmr Eml positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Ophmr Eml 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 Ophmr Eml will offset losses from the drop in Ophmr Eml's long position.| Stone Harbor vs. Pimco Emerging Markets | Stone Harbor vs. Pimco Emerging Local | Stone Harbor vs. Pimco Emerging Local | Stone Harbor vs. Pimco Emerging Local |
| Ophmr Eml vs. Pimco Emerging Markets | Ophmr Eml vs. Pimco Emerging Local | Ophmr Eml vs. Pimco Emerging Local | Ophmr Eml vs. Pimco Emerging Local |
Check out your portfolio center.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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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