Correlation Between Harbor Capital and Eagle Mid

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

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

Diversification Opportunities for Harbor Capital and Eagle Mid

0.86

Correlation Coefficient

Harbor Capital  Eagle Mid

Very poor diversification

The 3 months correlation between Harbor and Eagle is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Capital Appreciation and Eagle Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mid Cap and Harbor Capital 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 Capital Appreciation are associated (or correlated) with Eagle Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mid Cap has no effect on the direction of Harbor Capital i.e., Harbor Capital and Eagle Mid go up and down completely randomly.

Pair Corralation between Harbor Capital and Eagle Mid

Assuming the 90 days horizon Harbor Capital Appreciation is expected to under-perform the Eagle Mid. In addition to that, Harbor Capital is 1.88 times more volatile than Eagle Mid Cap. It trades about -0.13 of its total potential returns per unit of risk. Eagle Mid Cap is currently generating about -0.2 per unit of volatility. If you would invest  9,464  in Eagle Mid Cap on September 24, 2024 and sell it today you would lose (476.00) from holding Eagle Mid Cap or give up 5.03% of portfolio value over 90 days.

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

Harbor Capital Appreciation  vs.  Eagle Mid Cap

Harbor Capital Appre

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harbor Capital Appreciation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Harbor Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Mid Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Mid Cap are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eagle Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Harbor Capital and Eagle Mid

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

The idea behind Harbor Capital Appreciation and Eagle Mid 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..