Correlation Between Harbor Diversified and Blackrock Alternative

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

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

Diversification Opportunities for Harbor Diversified and Blackrock Alternative

0.85

Correlation Coefficient

Harbor Diversified  Blackrock Alternative

Very poor diversification

The 3 months correlation between Harbor and Blackrock is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Diversified Internation and Blackrock Alternative Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Alternative and Harbor Diversified 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 Diversified International are associated (or correlated) with Blackrock Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Alternative has no effect on the direction of Harbor Diversified i.e., Harbor Diversified and Blackrock Alternative go up and down completely randomly.

Pair Corralation between Harbor Diversified and Blackrock Alternative

Assuming the 90 days horizon Harbor Diversified International is expected to generate 3.32 times more return on investment than Blackrock Alternative. However, Harbor Diversified is 3.32 times more volatile than Blackrock Alternative Capital. It trades about 0.12 of its potential returns per unit of risk. Blackrock Alternative Capital is currently generating about 0.16 per unit of risk. If you would invest  1,199  in Harbor Diversified International on December 30, 2024 and sell it today you would earn a total of  72.00  from holding Harbor Diversified International or generate 6.01% return on investment over 90 days.

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

Harbor Diversified Internation  vs.  Blackrock Alternative Capital

Harbor Diversified

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Diversified International are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Harbor Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Alternative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Alternative Capital are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Blackrock Alternative 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 Diversified and Blackrock Alternative

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

The idea behind Harbor Diversified International and Blackrock Alternative Capital 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.