Correlation Between Harvest Canadian and Harvest Premium

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

By analyzing existing cross correlation between Harvest Canadian Equity and Harvest Premium Yield, you can compare the effects of market volatilities on Harvest Canadian and Harvest Premium 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 Canadian with a short position of Harvest Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Canadian and Harvest Premium.

Diversification Opportunities for Harvest Canadian and Harvest Premium

0.0

Correlation Coefficient

Harvest Canadian  Harvest Premium

Pay attention - limited upside

The 3 months correlation between Harvest and Harvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Canadian Equity and Harvest Premium Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Premium Yield and Harvest Canadian 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 Canadian Equity are associated (or correlated) with Harvest Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Premium Yield has no effect on the direction of Harvest Canadian i.e., Harvest Canadian and Harvest Premium go up and down completely randomly.

Pair Corralation between Harvest Canadian and Harvest Premium

If you would invest  943.00  in Harvest Premium Yield on December 30, 2024 and sell it today you would earn a total of  29.00  from holding Harvest Premium Yield or generate 3.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Harvest Canadian Equity  vs.  Harvest Premium Yield

Harvest Canadian Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harvest Canadian Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Harvest Canadian is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Harvest Premium Yield

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Premium Yield are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harvest Premium is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Harvest Canadian and Harvest Premium

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

The idea behind Harvest Canadian Equity and Harvest Premium Yield 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.