Correlation Between Stone Harbor and Nuveen Multi

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

Diversification Opportunities for Stone Harbor and Nuveen Multi

0.58

Correlation Coefficient

Stone Harbor  Nuveen Multi

Very weak diversification

The 3 months correlation between Stone and Nuveen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Emerging and Nuveen Multi Mrkt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Multi Mrkt 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 Nuveen Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Multi Mrkt has no effect on the direction of Stone Harbor i.e., Stone Harbor and Nuveen Multi go up and down completely randomly.

Pair Corralation between Stone Harbor and Nuveen Multi

Considering the 90-day investment horizon Stone Harbor Emerging is expected to under-perform the Nuveen Multi. In addition to that, Stone Harbor is 1.74 times more volatile than Nuveen Multi Mrkt. It trades about -0.01 of its total potential returns per unit of risk. Nuveen Multi Mrkt is currently generating about 0.0 per unit of volatility. If you would invest  615.00  in Nuveen Multi Mrkt on September 12, 2024 and sell it today you would lose (1.00) from holding Nuveen Multi Mrkt or give up 0.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Stone Harbor Emerging  vs.  Nuveen Multi Mrkt

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

Nuveen Multi Mrkt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Multi Mrkt has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy primary indicators, Nuveen Multi is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Stone Harbor and Nuveen Multi

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

The idea behind Stone Harbor Emerging and Nuveen Multi Mrkt 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.