Correlation Between Harvest Fund and Industrial

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

By analyzing existing cross correlation between Harvest Fund Management and Industrial and Commercial, you can compare the effects of market volatilities on Harvest Fund and Industrial 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 Harvest Fund with a short position of Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Fund and Industrial.

Diversification Opportunities for Harvest Fund and Industrial

-0.17

Correlation Coefficient

Harvest Fund  Industrial

Good diversification

The 3 months correlation between Harvest and Industrial is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Fund Management and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial and Harvest Fund 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 Harvest Fund Management are associated (or correlated) with Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of Harvest Fund i.e., Harvest Fund and Industrial go up and down completely randomly.

Pair Corralation between Harvest Fund and Industrial

Assuming the 90 days trading horizon Harvest Fund is expected to generate 28.76 times less return on investment than Industrial. But when comparing it to its historical volatility, Harvest Fund Management is 2.69 times less risky than Industrial. It trades about 0.01 of its potential returns per unit of risk. Industrial and Commercial is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  554.00  in Industrial and Commercial on September 12, 2024 and sell it today you would earn a total of  77.00  from holding Industrial and Commercial or generate 13.9% return on investment over 90 days.

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

Harvest Fund Management  vs.  Industrial and Commercial

Harvest Fund Management

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Fund Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Harvest Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Industrial and Commercial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial and Commercial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harvest Fund and Industrial

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

The idea behind Harvest Fund Management and Industrial and Commercial 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.