Correlation Between AdvisorShares Hotel and Harbor All

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

By analyzing existing cross correlation between AdvisorShares Hotel ETF and Harbor All Weather Inflation, you can compare the effects of market volatilities on AdvisorShares Hotel and Harbor All 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 AdvisorShares Hotel with a short position of Harbor All. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvisorShares Hotel and Harbor All.

Diversification Opportunities for AdvisorShares Hotel and Harbor All

-0.37

Correlation Coefficient

AdvisorShares Hotel  Harbor All

Very good diversification

The 3 months correlation between AdvisorShares and Harbor is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares Hotel ETF and Harbor All Weather Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor All Weather and AdvisorShares Hotel 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 AdvisorShares Hotel ETF are associated (or correlated) with Harbor All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor All Weather has no effect on the direction of AdvisorShares Hotel i.e., AdvisorShares Hotel and Harbor All go up and down completely randomly.

Pair Corralation between AdvisorShares Hotel and Harbor All

Given the investment horizon of 90 days AdvisorShares Hotel ETF is expected to generate 1.45 times more return on investment than Harbor All. However, AdvisorShares Hotel is 1.45 times more volatile than Harbor All Weather Inflation. It trades about 0.06 of its potential returns per unit of risk. Harbor All Weather Inflation is currently generating about 0.03 per unit of risk. If you would invest  2,448  in AdvisorShares Hotel ETF on October 3, 2024 and sell it today you would earn a total of  849.00  from holding AdvisorShares Hotel ETF or generate 34.68% return on investment over 90 days.

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

AdvisorShares Hotel ETF  vs.  Harbor All Weather Inflation

AdvisorShares Hotel ETF

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares Hotel ETF are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish fundamental indicators, AdvisorShares Hotel may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Harbor All Weather

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harbor All Weather Inflation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Harbor All is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AdvisorShares Hotel and Harbor All

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

The idea behind AdvisorShares Hotel ETF and Harbor All Weather Inflation 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.