Correlation Between Harvest Clean and PHN Multi

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

By analyzing existing cross correlation between Harvest Clean Energy and PHN Multi Style All Cap, you can compare the effects of market volatilities on Harvest Clean and PHN Multi 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 Clean with a short position of PHN Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Clean and PHN Multi.

Diversification Opportunities for Harvest Clean and PHN Multi

0.5

Correlation Coefficient

Harvest Clean  PHN Multi

Very weak diversification

The 3 months correlation between Harvest and PHN is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Clean Energy and PHN Multi Style All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHN Multi Style and Harvest Clean 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 Clean Energy are associated (or correlated) with PHN Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHN Multi Style has no effect on the direction of Harvest Clean i.e., Harvest Clean and PHN Multi go up and down completely randomly.

Pair Corralation between Harvest Clean and PHN Multi

Assuming the 90 days trading horizon Harvest Clean Energy is expected to generate 0.79 times more return on investment than PHN Multi. However, Harvest Clean Energy is 1.27 times less risky than PHN Multi. It trades about -0.08 of its potential returns per unit of risk. PHN Multi Style All Cap is currently generating about -0.1 per unit of risk. If you would invest  794.00  in Harvest Clean Energy on December 5, 2024 and sell it today you would lose (52.00) from holding Harvest Clean Energy or give up 6.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Harvest Clean Energy  vs.  PHN Multi Style All Cap

Harvest Clean Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harvest Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

PHN Multi Style

Risk-Adjusted Performance

Very Weak

Over the last 90 days PHN Multi Style All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Pair Trading with Harvest Clean and PHN Multi

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

The idea behind Harvest Clean Energy and PHN Multi Style All Cap 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.