Correlation Between Harbor Capital and Nationwide Small

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

Diversification Opportunities for Harbor Capital and Nationwide Small

0.83

Correlation Coefficient

Harbor Capital  Nationwide Small

Very poor diversification

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

Pair Corralation between Harbor Capital and Nationwide Small

Assuming the 90 days horizon Harbor Capital Appreciation is expected to under-perform the Nationwide Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Harbor Capital Appreciation is 1.0 times less risky than Nationwide Small. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Nationwide Small Pany is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,272  in Nationwide Small Pany on October 25, 2024 and sell it today you would earn a total of  49.00  from holding Nationwide Small Pany or generate 3.85% return on investment over 90 days.

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

Harbor Capital Appreciation  vs.  Nationwide Small Pany

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.

Nationwide Small Pany

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Small Pany are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nationwide Small 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 Capital and Nationwide Small

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

The idea behind Harbor Capital Appreciation and Nationwide Small Pany 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.