Correlation Between Embark Commodity and Harbor Convertible

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

By analyzing existing cross correlation between Embark Commodity Strategy and Harbor Vertible Securities, you can compare the effects of market volatilities on Embark Commodity and Harbor Convertible 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 Embark Commodity with a short position of Harbor Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Commodity and Harbor Convertible.

Diversification Opportunities for Embark Commodity and Harbor Convertible

0.05

Correlation Coefficient

Embark Commodity  Harbor Convertible

Significant diversification

The 3 months correlation between Embark and Harbor is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Embark Commodity Strategy and Harbor Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Vertible Secu and Embark Commodity 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 Embark Commodity Strategy are associated (or correlated) with Harbor Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Vertible Secu has no effect on the direction of Embark Commodity i.e., Embark Commodity and Harbor Convertible go up and down completely randomly.

Pair Corralation between Embark Commodity and Harbor Convertible

Assuming the 90 days horizon Embark Commodity Strategy is expected to generate 1.02 times more return on investment than Harbor Convertible. However, Embark Commodity is 1.02 times more volatile than Harbor Vertible Securities. It trades about 0.38 of its potential returns per unit of risk. Harbor Vertible Securities is currently generating about 0.14 per unit of risk. If you would invest  1,005  in Embark Commodity Strategy on October 25, 2024 and sell it today you would earn a total of  56.00  from holding Embark Commodity Strategy or generate 5.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Embark Commodity Strategy  vs.  Harbor Vertible Securities

Embark Commodity Strategy

Risk-Adjusted Performance

5 of 100

Modest

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

Harbor Vertible Secu

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Vertible Securities are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Harbor Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Embark Commodity and Harbor Convertible

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

The idea behind Embark Commodity Strategy and Harbor Vertible Securities 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.