Correlation Between Harbor Capital and Mainstay Large

Can any of the company-specific risk be diversified away by investing in both Harbor Capital and Mainstay Large 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 Mainstay Large 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 Mainstay Large Cap, you can compare the effects of market volatilities on Harbor Capital and Mainstay Large 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 Mainstay Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Capital and Mainstay Large.

Diversification Opportunities for Harbor Capital and Mainstay Large

-0.16

Correlation Coefficient

Harbor Capital  Mainstay Large

Good diversification

The 3 months correlation between Harbor and Mainstay is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Capital Appreciation and Mainstay Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Large 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 Mainstay Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Large Cap has no effect on the direction of Harbor Capital i.e., Harbor Capital and Mainstay Large go up and down completely randomly.

Pair Corralation between Harbor Capital and Mainstay Large

Assuming the 90 days horizon Harbor Capital Appreciation is expected to generate 0.9 times more return on investment than Mainstay Large. However, Harbor Capital Appreciation is 1.11 times less risky than Mainstay Large. It trades about 0.11 of its potential returns per unit of risk. Mainstay Large Cap is currently generating about 0.06 per unit of risk. If you would invest  6,244  in Harbor Capital Appreciation on September 24, 2024 and sell it today you would earn a total of  5,310  from holding Harbor Capital Appreciation or generate 85.04% return on investment over 90 days.

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

Harbor Capital Appreciation  vs.  Mainstay Large 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.

Mainstay Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Harbor Capital and Mainstay Large

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

The idea behind Harbor Capital Appreciation and Mainstay Large 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.