Correlation Between Blackrock Health and Harbor International

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

By analyzing existing cross correlation between Blackrock Health Sciences and Harbor International Fund, you can compare the effects of market volatilities on Blackrock Health and Harbor International 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 Blackrock Health with a short position of Harbor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Health and Harbor International.

Diversification Opportunities for Blackrock Health and Harbor International

0.58

Correlation Coefficient

Blackrock Health  Harbor International

Very weak diversification

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

Pair Corralation between Blackrock Health and Harbor International

Assuming the 90 days horizon Blackrock Health is expected to generate 2.96 times less return on investment than Harbor International. But when comparing it to its historical volatility, Blackrock Health Sciences is 1.11 times less risky than Harbor International. It trades about 0.08 of its potential returns per unit of risk. Harbor International Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,439  in Harbor International Fund on December 21, 2024 and sell it today you would earn a total of  469.00  from holding Harbor International Fund or generate 10.57% return on investment over 90 days.

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

Blackrock Health Sciences  vs.  Harbor International Fund

Blackrock Health Sciences

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Health Sciences are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harbor International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor International Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blackrock Health and Harbor International

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

The idea behind Blackrock Health Sciences and Harbor International Fund 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.