Correlation Between Harbor Core and Harbor Capital

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

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

Diversification Opportunities for Harbor Core and Harbor Capital

-0.73

Correlation Coefficient

Harbor Core  Harbor Capital

Pay attention - limited upside

The 3 months correlation between Harbor and Harbor is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Core Bond and Harbor Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Capital Appre and Harbor Core 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 Core Bond are associated (or correlated) with Harbor Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Capital Appre has no effect on the direction of Harbor Core i.e., Harbor Core and Harbor Capital go up and down completely randomly.

Pair Corralation between Harbor Core and Harbor Capital

Assuming the 90 days horizon Harbor Core Bond is expected to under-perform the Harbor Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Harbor Core Bond is 3.21 times less risky than Harbor Capital. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Harbor Capital Appreciation is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  10,365  in Harbor Capital Appreciation on August 31, 2024 and sell it today you would earn a total of  1,153  from holding Harbor Capital Appreciation or generate 11.12% return on investment over 90 days.

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

Harbor Core Bond  vs.  Harbor Capital Appreciation

Harbor Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Harbor Capital Appre

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Capital Appreciation are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Harbor Capital may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Harbor Core and Harbor Capital

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

The idea behind Harbor Core Bond and Harbor Capital Appreciation 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 Anywhere module to track or share privately all of your investments from the convenience of any device.