Correlation Between Harvest Energy and Harvest Premium

Can any of the company-specific risk be diversified away by investing in both Harvest Energy 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 Energy 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 Energy Leaders and Harvest Premium Yield, you can compare the effects of market volatilities on Harvest Energy 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 Energy with a short position of Harvest Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Energy and Harvest Premium.

Diversification Opportunities for Harvest Energy and Harvest Premium

-0.53

Correlation Coefficient

Harvest Energy  Harvest Premium

Excellent diversification

The 3 months correlation between Harvest and Harvest is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Energy Leaders 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 Energy 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 Energy Leaders 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 Energy i.e., Harvest Energy and Harvest Premium go up and down completely randomly.

Pair Corralation between Harvest Energy and Harvest Premium

Assuming the 90 days trading horizon Harvest Energy Leaders is expected to generate 1.39 times more return on investment than Harvest Premium. However, Harvest Energy is 1.39 times more volatile than Harvest Premium Yield. It trades about 0.01 of its potential returns per unit of risk. Harvest Premium Yield is currently generating about -0.1 per unit of risk. If you would invest  389.00  in Harvest Energy Leaders on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Harvest Energy Leaders or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Harvest Energy Leaders  vs.  Harvest Premium Yield

Harvest Energy Leaders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvest Energy Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Harvest Energy is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Harvest Premium Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvest Premium Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Harvest Premium is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Harvest Energy and Harvest Premium

The main advantage of trading using opposite Harvest Energy and Harvest Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Energy 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 Energy Leaders 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.