Correlation Between Cornerstone Strategic and Stone Harbor

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

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

Diversification Opportunities for Cornerstone Strategic and Stone Harbor

-0.37

Correlation Coefficient

Cornerstone Strategic  Stone Harbor

Very good diversification

The 3 months correlation between Cornerstone and Stone is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value 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 Cornerstone Strategic 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 Cornerstone Strategic Value 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 Cornerstone Strategic i.e., Cornerstone Strategic and Stone Harbor go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Stone Harbor

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 1.6 times more return on investment than Stone Harbor. However, Cornerstone Strategic is 1.6 times more volatile than Stone Harbor Emerging. It trades about 0.0 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about -0.01 per unit of risk. If you would invest  856.00  in Cornerstone Strategic Value on September 12, 2024 and sell it today you would lose (3.00) from holding Cornerstone Strategic Value or give up 0.35% of portfolio value over 90 days.

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

Cornerstone Strategic Value  vs.  Stone Harbor Emerging

Cornerstone Strategic

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of very unsteady essential indicators, Cornerstone Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Cornerstone Strategic and Stone Harbor

The main advantage of trading using opposite Cornerstone Strategic and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic 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 Cornerstone Strategic Value 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.