Correlation Between Harte Hanks and Cable One

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

By analyzing existing cross correlation between Harte Hanks and Cable One, you can compare the effects of market volatilities on Harte Hanks and Cable One 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 Harte Hanks with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harte Hanks and Cable One.

Diversification Opportunities for Harte Hanks and Cable One

-0.83

Correlation Coefficient

Harte Hanks  Cable One

Pay attention - limited upside

The 3 months correlation between Harte and Cable is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Harte Hanks and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and Harte Hanks 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 Harte Hanks are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Harte Hanks i.e., Harte Hanks and Cable One go up and down completely randomly.

Pair Corralation between Harte Hanks and Cable One

Considering the 90-day investment horizon Harte Hanks is expected to under-perform the Cable One. In addition to that, Harte Hanks is 1.81 times more volatile than Cable One. It trades about -0.25 of its total potential returns per unit of risk. Cable One is currently generating about -0.18 per unit of volatility. If you would invest  40,486  in Cable One on September 15, 2024 and sell it today you would lose (3,052) from holding Cable One or give up 7.54% of portfolio value over 90 days.

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

Harte Hanks  vs.  Cable One

Harte Hanks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harte Hanks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cable One

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cable One are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, Cable One displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Harte Hanks and Cable One

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

The idea behind Harte Hanks and Cable One 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..