Correlation Between Harbor ETF and Capital Group

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

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

Diversification Opportunities for Harbor ETF and Capital Group

0.99

Correlation Coefficient

Harbor ETF  Capital Group

No risk reduction

The 3 months correlation between Harbor and Capital is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Harbor ETF Trust and Capital Group Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Growth and Harbor ETF 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 ETF Trust are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Growth has no effect on the direction of Harbor ETF i.e., Harbor ETF and Capital Group go up and down completely randomly.

Pair Corralation between Harbor ETF and Capital Group

Given the investment horizon of 90 days Harbor ETF Trust is expected to under-perform the Capital Group. In addition to that, Harbor ETF is 8.23 times more volatile than Capital Group Growth. It trades about -0.14 of its total potential returns per unit of risk. Capital Group Growth is currently generating about -0.09 per unit of volatility. If you would invest  3,797  in Capital Group Growth on December 21, 2024 and sell it today you would lose (296.00) from holding Capital Group Growth or give up 7.8% of portfolio value over 90 days.

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

Harbor ETF Trust  vs.  Capital Group Growth

Harbor ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harbor ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Etf's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Capital Group Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capital Group Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Etf's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Harbor ETF and Capital Group

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

The idea behind Harbor ETF Trust and Capital Group Growth 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.