Correlation Between Harvest Brand and IShares SPTSX

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

By analyzing existing cross correlation between Harvest Brand Leaders and iShares SPTSX 60, you can compare the effects of market volatilities on Harvest Brand and IShares SPTSX 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 Harvest Brand with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Brand and IShares SPTSX.

Diversification Opportunities for Harvest Brand and IShares SPTSX

0.75

Correlation Coefficient

Harvest Brand  IShares SPTSX

Poor diversification

The 3 months correlation between Harvest and IShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Brand Leaders and iShares SPTSX 60 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX 60 and Harvest Brand 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 Harvest Brand Leaders are associated (or correlated) with IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX 60 has no effect on the direction of Harvest Brand i.e., Harvest Brand and IShares SPTSX go up and down completely randomly.

Pair Corralation between Harvest Brand and IShares SPTSX

Assuming the 90 days trading horizon Harvest Brand Leaders is expected to under-perform the IShares SPTSX. But the etf apears to be less risky and, when comparing its historical volatility, Harvest Brand Leaders is 1.18 times less risky than IShares SPTSX. The etf trades about -0.05 of its potential returns per unit of risk. The iShares SPTSX 60 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,703  in iShares SPTSX 60 on December 29, 2024 and sell it today you would earn a total of  52.00  from holding iShares SPTSX 60 or generate 1.4% return on investment over 90 days.

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

Harvest Brand Leaders  vs.  iShares SPTSX 60

Harvest Brand Leaders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harvest Brand Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Harvest Brand is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

iShares SPTSX 60

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SPTSX 60 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares SPTSX is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Harvest Brand and IShares SPTSX

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

The idea behind Harvest Brand Leaders and iShares SPTSX 60 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.