Correlation Between Harbor Capital and Global Strategist

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

By analyzing existing cross correlation between Harbor Capital Appreciation and Global Strategist Portfolio, you can compare the effects of market volatilities on Harbor Capital and Global Strategist 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 Harbor Capital with a short position of Global Strategist. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Capital and Global Strategist.

Diversification Opportunities for Harbor Capital and Global Strategist

0.79

Correlation Coefficient

Harbor Capital  Global Strategist

Poor diversification

The 3 months correlation between Harbor and Global is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Capital Appreciation and Global Strategist Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Strategist and Harbor Capital 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 Harbor Capital Appreciation are associated (or correlated) with Global Strategist. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Strategist has no effect on the direction of Harbor Capital i.e., Harbor Capital and Global Strategist go up and down completely randomly.

Pair Corralation between Harbor Capital and Global Strategist

Assuming the 90 days horizon Harbor Capital is expected to generate 3.68 times less return on investment than Global Strategist. In addition to that, Harbor Capital is 2.13 times more volatile than Global Strategist Portfolio. It trades about 0.02 of its total potential returns per unit of risk. Global Strategist Portfolio is currently generating about 0.12 per unit of volatility. If you would invest  1,779  in Global Strategist Portfolio on October 24, 2024 and sell it today you would earn a total of  24.00  from holding Global Strategist Portfolio or generate 1.35% return on investment over 90 days.

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

Harbor Capital Appreciation  vs.  Global Strategist Portfolio

Harbor Capital Appre

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harbor Capital Appreciation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Harbor Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Global Strategist

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Strategist Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Global Strategist is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Harbor Capital and Global Strategist

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

The idea behind Harbor Capital Appreciation and Global Strategist Portfolio 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.