Correlation Between Harbor Small and Embark Commodity

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

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

Diversification Opportunities for Harbor Small and Embark Commodity

-0.31

Correlation Coefficient

Harbor Small  Embark Commodity

Very good diversification

The 3 months correlation between Harbor and Embark is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Small Cap and Embark Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Commodity Strategy and Harbor Small 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 Small Cap are associated (or correlated) with Embark Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Commodity Strategy has no effect on the direction of Harbor Small i.e., Harbor Small and Embark Commodity go up and down completely randomly.

Pair Corralation between Harbor Small and Embark Commodity

Assuming the 90 days horizon Harbor Small Cap is expected to under-perform the Embark Commodity. In addition to that, Harbor Small is 2.21 times more volatile than Embark Commodity Strategy. It trades about -0.08 of its total potential returns per unit of risk. Embark Commodity Strategy is currently generating about 0.22 per unit of volatility. If you would invest  999.00  in Embark Commodity Strategy on December 23, 2024 and sell it today you would earn a total of  88.00  from holding Embark Commodity Strategy or generate 8.81% return on investment over 90 days.

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

Harbor Small Cap  vs.  Embark Commodity Strategy

Harbor Small Cap

Risk-Adjusted Performance

Very Weak

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

Embark Commodity Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Embark Commodity Strategy are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Embark Commodity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Harbor Small and Embark Commodity

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

The idea behind Harbor Small Cap and Embark Commodity Strategy 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.